tweedie bowing out of todd energy

But not out of CUE! Interesting reading


Tweedie bowing out of Todd Energy

Neil Ritchie, New Zealand
Friday, 19 November 2010

PETROLEUM industry veteran Richard Tweedie is retiring after more than two decades of leading the energy arm of the Todd family business empire.

Richard Tweedie, managing director, Todd Energy.

Ive been planning this for some time but have kept it pretty quiet. Yes, Im retiring at the end of this year ... I turn 65 in January and thought now would be a good time, the Todd Energy managing director told PetroleumNews.net from Wellington.

Im still enjoying it ... and will still keep my hand in by remaining as chairman of Cue, he added, referring to listed junior Cue Energy Resources, in which Todd Petroleum Mining holds a 27% stake and Tweedie a 0.49% interest.

He said Todd Energy was undertaking an international recruitment search to find a new chief executive, though the board had yet to appoint a replacement.

A law graduate of the Victoria University at Wellington, Tweedie first joined the Todd Corporation in 1976 and worked for several years in the Todd Motors vehicle assembly plant in Wellington but Ive probably been with energy for about 25 years now.

Tweedie said the energy arm of the Todd empire was now a multi-billion dollar business and many times the size of the operation during the mid-1980s when Todds energy assets were essentially only its stakes in the offshore Taranaki Maui and onshore Kapuni gas fields.

There were three staff when I started, now there are 400 or so and we have grown the vertically integrated business from upstream to downstream, electricity generation and retailing, gas wholesaling and retailing, solar, etcetera.

He said there were some similarities between where Todd Energy was 25 years ago and where Cue was today, although Cue already had a more diversified and international petroleum portfolio, with production in New Zealand, Indonesia and Papua New Guinea.

Todd Energys assets used to be only several hundred million dollars, now they exceed $NZ4 billion.

The past two years had been ones of rapid growth for Cue, with its share price increasing from A14c to about A40c and its market capitalisation increasing from $A88 million to about $A280 million.

The most recent net profit of $A27.5 million was the highest yet, gross profit had increased by 98% to $43.6 million and production income was up 80% to $A54.7 million.

Tweedie also said he was sure more wells would be drilled in Todds onshore Taranaki Mangahewa gas field, though he did not know exactly when.

There will be future development wells, only time will tell when, but they are in the pipeline planning wise.

Although Todd was still evaluating the recent Mangahewa-4 and 6 wells, together with the Waitui-1 well in the adjacent lease PEP 51156, Tweedie was pretty confident an additional one trillion cubic feet of gas would be recovered from the field.

There is a significant reservoir and gas resource there . . . but we still have to prove it up, he said.

Todd is also a partner in the nearby near-shore Pohokura gas field where, early this month, operator Shell Exploration New Zealand asked for a 7.5 year extension to appraise the promising Okoki prospect within the original exploration lease.

Tweedie said that length of time was necessary because Pohokura production capacity was limited to about 200 million cubic feet per day and about 80 billion cubic feet per annum.

As well, usually only three of the eight wells were necessary to fulfil take-or-pay agreements with customers.

And, if this gas reinjection project goes ahead, there would be no room for Okoki there would be capacity constraints, yes, Tweedie said, referring to the possible gas reinjection project reported by PNN last month.

PNN said then that Shell, Todd and Austrias OMV were considering gas reinjection as a means of maintaining reservoir pressure, extending the life of the field and, most importantly, allowing light oil to be extracted from the condensate-rich raw gas stream as the field entered its fifth year of production.

No one would want to waste money drilling something that would just sit there, if in fact it is a discovery, Tweedie said.

There will probably not be any more drilling until closer to the end of field life; it [Okoki] will be tied to that.

Pohokura is New Zealands largest gas resource, with estimated remaining reserves of about 900 billion cubic feet.

One of the most colourful characters in the New Zealand energy industry, Tweedie has been at the centre of many courtroom battles and other publicised disputes over the years, often involving long-time joint venture partner Shell.

Last July Shell described Tweedie as having been highly successful in delivering significant value to the companys owners, the Todd Corporation and Todd family, through intransigence, delays, negativity and threats.