“Never again”: the cost to taxpayers of the Tui oilfield clean-up balloons at $ 349 million
The cost to taxpayers of decommissioning the Tui oil field off Taranaki more than doubled to $ 394 million, Energy Minister Megan Woods confirmed.
But Woods told a select committee on Thursday that she was determined the situation would not happen again.
Malaysian company Tamarind Taranaki purchased the Tui field towards the end of its life in 2017 to extract the remaining oil, while taking responsibility for decommissioning.
But the government was forced to take over the oilfield last year and foot the bill for the cleanup after production ceased on the spot and Tamarind Taranaki fell into receivership.
* Iwi partnership to facilitate the plugging of the Tui oil field
* Tamarind Taranaki’s collapse leads to liquidation of offshore oilfield supply company
* Tamarind Taranaki said to stop pumping oil from the offshore field until the conditions are right
* Crown could pay $ 155 million bill to decommission Taranaki oilfield
The government set aside $ 154 million last year to pay for the work.
But Woods said he had to set aside an additional $ 195 million in this year’s budget because the original cost estimate was based on a 2015 Tamarind study that turned out to be inaccurate.
“What we have seen is that the costs are significantly higher than that,” she said.
A spokeswoman for the minister confirmed that the bill is now estimated at $ 349 million.
“This is a situation we never want to find ourselves in again,” Woods told MPs.
“This is a situation that was created because of a loophole in the legislation that we filled when we became government,” she said.
The difference meant that the same level of control was not applied when transferring ownership of an oilfield as that applied when an operator initially applied for a drilling permit.
“We changed the law in 2018 to make sure we never found ourselves in this situation again,” Woods said.