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Todd Energy Celebrates 25 Years of Production

Todd Energy Celebrates 25 Years of Production from New Zealand’s First Significant Oil Field

Todd Energy this evening will be celebrating 25 years of McKee production in Taranaki. The dinner will be attended by Energy & Resources Minister, Hon Gerry Brownlee as well as local dignitaries, McKee staff past and present and people from the New Zealand oil and gas industry, in celebration of the first significant oil field in New Zealand.

Richard Tweedie, Todd Energy Managing Director said “its been a great 25 years, Fletcher Energy, The Crown and STOS have been involved, but when we took over McKee & Mangahewa it was the turning point for Todd Energy and the platform for our business going forward.”

In 1961 Todd Energy was part of Shell BP and Todd Oil Services Ltd, the Company who drilled and tested the Mangahewa 1 well, which wasn’t a producer, so was abandoned. Now, nearly half a century on, both the Mangahewa field and neighbouring McKee field are steadily flowing crude oil, gas and condensate for 100% owner and operator, Todd Energy.

“When Todd Energy bought McKee, the future of the field was far from bright,” said Mr Tweedie. Some in the industry believed that the McKee reserves would “run out” between 2004 and 2008, “which hasn’t happened,” he said.

Each day, the production station typically produces 420 barrels of crude oil and 800 barrels of condensate, as well as feeding 20-25 Terajoules of gas into the Maui gas export cross-country pipeline.

Over the past 25 years, the McKee field has produced, 47 million barrels of crude oil and over 150 Petajoules of gas, representing over 1.2 billion New Zealand dollars of value at today’s commodity prices.

“Remaining reserves for McKee and Mangahewa are significantly higher now than they were when Todd Energy bought the fields in 2002, despite the subsequent 8 years of production,” added Mr Tweedie.

The McKee field was discovered in 1979 and was named in honour of Kiwi energy industry advocate and scientist Tasman Joseph McKee. The first well, McKee 1, which was spudded on 19 October 1979 wasn’t a producer, but it told Government-owned company Petrocorp Exploration there was potential in the field.

McKee 2 was spudded on 14 August 1980 and in1982 a Think Big decision was made to build the McKee production station and a secluded valley on Otaraoa Road near Tikorangi in Taranaki was chosen as the site for the station and work began in 1983.

The McKee Production Station was completed on time and on budget in October 1984. But it wasn’t until June 5, 1985, that Prime Minister David Lange officially opened the station.

The total investment, including the cost of wells, production station, oil and gas pipelines, the Omata tank farm and load-out facilities at Port Taranaki, was approximately 70 million dollars.
But that investment would be paid back within the first financial year, thanks to revenue from 2.7 million barrels of oil and 83 million cubic metres of gas.

The McKee Field grew to encompass 40 wells. In the late 1980s production peaked at almost 12,000 barrels of oil per day. In 1997, a well called Mangahewa 2 was successfully drilled and
tested – 36 years after Shell-BP-Todd drilled the exploration well Mangahewa 1.

In 2001, process facilities for the Mangahewa field were added to the McKee production station. This meant high pressure gas and condensate from the Mangahewa wells could be processed
on site.

Mr Tweedie commented “the success of Mangahewa 2 opened up an exciting opportunity for Todd Energy and in 2002 we bought the McKee and Mangahewa fields and production station from Shell, then in mid 2006, Todd Energy management took over operation of the fields itself.”

There are 12 wells still in production on the McKee field, and the Mangahewa field is rapidly expanding its gas and condensate reserves. Mangahewa 3 was drilled and successfully tested in 2007.

McKee and Mangahewa product is either piped and taken by tankers or by ship via Todd’s tanker the MS Sophie, to the wider North Island and beyond.

Todd Energy installed cogeneration units at McKee in 2008 and electricity units in 2009 which together produce 11MW of electricity for the national grid each day. In 2011 Todd Energy will be building a $65million LPG extraction plant adjacent to the production station, proving there is still a lot of life in New Zealand’s first modern oil field.

“Now, not only is the McKee & Mangahewa operation surviving, it’s thriving and the plant is at the hub of Todd Energy’s gas and oil generation in New Zealand”, said Mr Tweedie.


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