OilVoice - Onshore New Zealand Taranaki Kahili Block Offer Opens

Onshore New Zealand Taranaki Kahili Block Offer Opens

Wednesday, February 10, 2010

Energy and Resources Minister Gerry Brownlee today announced the opening of bidding for a block offer over the onshore Kahili gas field in Taranaki.

The Kahili Field was discovered via drilling of the Kahili-1B sidetrack well in 2002. The well was a directional sidetrack to evaluate the Tariki sandstone oil reservoir encountered in the drilling of Kahili-1 in 2001 and was tested via DST to produce gas, oil and water. The Tariki Sandstone in Kahili-1B has a true vertical gross thickness of 164.9m with a net thickness of 117.5m. The production testing flowed gas at 4.1mmcfd with 32 stb/mmscf condensate/gas ratio on a 36/64" choke with a final flowing tubing head pressure of 565 psi.

The Mining permit for Kahili was granted in 2004, however subsequent development of the field failed after a short period. The Kahili-1B well is closed-in but not abandoned. The Mining permit was surrendered in March 2009.

Officials consider that the failure of the field was due to aggressive water influx into the small reservoir compartment that was tapped by the production zone. Further hydrocarbons volumes are likely to remain in adjacent separate compartments of this complex Tariki sandstone reservoir. The presence of a gas facility and pipeline at the Kahili wellhead reduce threshold volumes required to commercialise this field. A well placed further sidetrack could recover more gas condensate.

The 5.99 square kilometre block offer includes the Kahili-1B well, which has been closed but not filled in.

'The area includes the gas facility and pipeline at Kahili wellhead, which makes the gas volumes required for commercial viability of the field very low.
The Government believes the potential of the field can be realised and the tender is being opened today to see what commercial interest there is,' said Mr Brownlee.

"Gas discoveries are important to New Zealand's energy security and provide local employment and support regional growth and local businesses.'
The block offer will run for almost three months and will close on 3 May 2010.

Data on the block offer is available from Crown Minerals.