MAUI GAS RESERVES

Energy Minister Max Bradford is concerned to see parties in the gas industry disputing recently published Ministry of Commerce data showing its estimates of Maui gas reserves have been revised up 40 per cent.

The Ministry information is based on internationally recognised reserve definitions and draws on data regularly provided by the field operators, Mr Bradford said.

"It is interesting to reflect on the main reason why Fletcher Challenge Energy considers that there should be no significant change to reserve estimates," Mr Bradford said.

"This apparently stems from Fletcher's view that undeveloped reserves or undeveloped reserves in an existing field for which no commitment to wells and facilities has been made, should not be counted.

"I find it hard to follow the logic here. The internationally recognised approach which is used by Fletcher itself for counting proven and probable reserves would count reserves regardless of whether there was a current commitment
to invest.

"Clearly these are valid reserves. I also understand that the Ministry's recently released estimates are consistent with those published by Fletcher itself last year."

Mr Bradford said another lesser difference between the Ministry's assessment and that of Fletcher apparently arises from whether or not to count potential LPG production.

"To allow meaningful national reserve totals across all fields to be compiled, the Ministry has chosen, after consultation with the industry, to use a standardised definition for all fields that includes LPG," he said.

"While this may differ from Fletcher's approach, I do not see a problem providing everyone is clear on what is being counted. The Ministry, as Fletcher has acknowledged, has made it clear it has included the LPG."