Australia-based Horizon Oil Limited reported that the operator of the Maari oilfield has advised to shut down the oil field until December. And there is an upgrade work of a major facility and equipment.

 

The FPSO floating tanker is duty for the processing and storing work at the field. But it will be delivered to a New Zealand port to have an upgrade. While off station, a new swivel, which allows the vessel to rotate around its mooring, will be installed. There was a bearing problem found in the existing swivel recently, then the company has made a plan to replace this equipment.

 

The Raroa is being prepared to leave from the station. All the crude oil left on the board will be moved. The task will be finished in a several weeks.

 

At the same time, the company will use the chance to replace some of the mooring lines. Three of the eight lines were wearing out. One of the lines was recently repaired. A vessel and industrial valves will be prepared to undertake the task.

 

The company is also prepared to construct the tie-ins of new wells and the upgrade of the well is being conducted. The shut-in period is fully used.

 

OMv has advised that the upgrade work will effect the expected production, but the decision is wise in the long term.

 

The maintenance and construction work is planned in September, The purchase, repair and upgrade of the Raroa were included in the the Maari Growth investment program. All the work done at the same time ensures hat the facilities will be in upgrade situation prior to the first new wells coming on stream early next year.”

 

The jackup is expected to start work at the Maari field in the first quarter of 2014. The Maari joint venture also has the Kan Tan IV (mid-water semisub) on site in a separate program. The first well, Manaia 2, is expected to be spudded today.

 

The plan to upgrade the major facility and equipment in advance proves that Marri has a long term view and a strong asset. And it keeps pace with the point of the outlook of remaining reserves and prospective resources.

 

The flexibility and control the Maari showed this year is an important factor in the upgrades and repair of the Raroa project which is expected to have field life, high production. The main purpose of the company is to ensure safety and efficiency.

 

The repair works and the swivel assembly replacement will cost about $70 million, and the insurance can undertake a part of the whole fund. Taking into account the previously budgeted production rates, scheduled maintenance and timing of crude oil liftings, Horizon Oil’s share of deferred cashflow during the period in which the upgrade activities are undertaken is estimated to be approximately $5 million.

 

The net cost of the repair and the deferral of cashflow will not make differences to the funding of Horizen Oil’s 2013-2014 capital expenditure program.