Tui Project: decommissioning the Tui oil field

The NZ Government has commenced work to manage the Tui oil field assets and plan for decommissioning of its wells in the wake of the financial problems affecting the permit operator Tamarind Taranaki Ltd.

Latest status

As at 5 July

Work to remove the subsea infrastructure by Shelf Subsea is progressing well, with specialist divers completing installation of rigging for recovery of all the infrastructure in mid-April. 

On 26 June, Shelf reached a Phase 2 milestone with the final Tui flexibles recovered onboard the 112m vessel Southern Star – equating to a total of 39km (weighing about 2300 tonnes). The flexibles include production flowlines and risers, gas lift coiled tubing and risers, and control umbilicals. In addition, approximately 350 tonnes of other structures were also removed including gravity base anchors, anode skids, and riser bases.

The Southern Star is being prepared and reconfigured for the final stages of Phase 2 – removal of the four mid-water arches and exploration wellhead severance.

Hayes Metals has been awarded the contract for recycling and disposal of the Tui Oil Field subsea infrastructure (flexibles and structures). Early indications are that 90% of the subsea infrastructure will be recycled or reused.

Photo of recovered flowlines on the deck of the Southern Star.

Recovered flowlines being loaded onboard the diving support vessel, the Southern Star

The decommissioning process

The decommissioning of the Tui field is being conducted in 3 phases; the demobilisation of the FPSO Umuroa coupled with works to ensure that the subsea assets are left safe and secure (completed in May 2021), removal of the subsea infrastructure and plugging and abandonment of the wells.

The subsequent phases of work have required detailed planning and environmental approvals. It is anticipated that Phase 2 will be completed this year and the final phase will be carried out next summer.

The total cost of the decommissioning work will depend on a number of factors.

Cabinet initially appropriated $155 million to fund the Tui decommissioning and a further $196 million was appropriated in the May 2021 Budget.

Treaty partners and stakeholders

The Crown is committed to continued meaningful engagement and consultation with Te Kāhui o Taranaki (Taranaki Iwi) and other Treaty partners throughout the entire decommissioning process.

The ultimate decommissioning of the Tui Oil Field entails the removal of the subsea infrastructure, with the challenges arising from details of how this is best achieved. Te Kāhui o Taranaki (Taranaki Iwi) continue their involvement  to ensure the infrastructure is safely removed and in a timely manner.

Stakeholders, including the oil and gas industry, service companies, local government, non-government organisations and other interested parties will be kept informed of developments and consulted where applicable.

Contracts and recruitment

MBIE does not have staff who are specialists in the decommissioning of offshore petroleum assets so it needs to procure external technical advice to perform this role.

MBIE has had approval for a small number of fixed-term roles. These will be advertised openly and also listed on the MBIE careers website. Additional advertisements may be utilised and the jobs will be referenced in the ‘Contracts’ section below.

For information on recently filled positions or awarded and upcoming contracts:

Legislative change

The Government has amended the Crown Minerals Act 1991 in the wake of the issues affecting Tamarind Taranaki and its ability to fund the decommissioning of the Tui oil field.

The amendment, enacted in December 2021, imposes statutory obligation on all current and future petroleum permit and licence holders to decommission their wells and infrastructure.

It also enables the regulator to periodically assess permit and licence holders’ financial capability to meet their decommissioning obligations, requires permit and licence holders to maintain adequate financial security for decommissioning purposes, requires permit and licence holders to make a financial contribution towards any post-decommissioning work, expands enforcement powers and makes other minor changes.

Crown Minerals (Decommissioning and Other Matters) Amendment Bill(external link) — New Zealand Parliament website

Tamarind Taranaki Ltd (in receivership and liquidation)

Tamarind Taranaki Ltd – permit operator of the Tui oil field – was placed in receivership and liquidation in December 2019.

Its parent company, Tamarind Resources Private Limited (Singapore) went into receivership in March 2020 and into liquidation in April 2020.

The Crown is an unsecured creditor in respect of Tamarind Taranaki Ltd (TTL).

The liquidators of the Tamarind companies have disclaimed the Tui assets to the Crown, but the petroleum mining permit currently remains with the liquidators.

Further information

Documents related to the Tui Project are available here:

Cabinet Paper - The Crown's Approach to Decommissioning the Tui Oil Field(external link)

Contact

For more information on the Tui decommissioning process please email decommissioning@mbie.govt.nz

Last updated: 05 July 2022