Singapore-based oil and gas company Jadestone Energy has terminated its agreement to acquire 69% interest in the Maari Project, offshore New Zealand.

In November 2019, the company signed a sale and purchase agreement (SAP) with OMV New Zealand, a subsidiary of Austria-based OMV, which was expected to be closed in 2020.

At the end of 2021, the New Zealand government made legislative changes to its upstream regulatory framework.

Since then, Jadestone has been continually engaged with OMV New Zealand and the New Zealand government, seeking clarity on the terms and timeline to complete the transaction.

The acquisition was delayed due to a lack of progress in obtaining regulatory approval, and uncertainty over its timing for transfer of ownership and operatorship, said the company.

Both companies have now decided to terminate the transaction.

Jadestone Energy president and CEO Paul Blakeley said: “Whilst disappointing, we have been signalling that the lack of progress on Maari was an increasing concern and today, almost 12 months after the new legislation came into effect, there is still little to no clarity on what is required from Jadestone to receive the necessary government approval to complete the acquisition.

“Nearly three years after the acquisition was first announced, and with an upcoming license expiry in 2027, this leaves insufficient time to confidently invest in the asset and therefore, despite our best efforts, it is now time to move on.

“When balanced against the growing number of alternative inorganic growth opportunities elsewhere in the wider Asia-Pacific region, Jadestone cannot continue to spend time and resources on the Maari process, and we are firm in the belief that this decision is in the best interests of the company.”

The Maari project represents a mid-life producing asset and comprises the Maari and Manaia oil fields, which are owned and operated by OMV and its joint venture partners.

OMV owns 69% of the property, while its partners Horizon Oil International hold a 26% stake, and Cue Taranaki 5% of the interest Petroleum Mining Permit (PMP) for Maari.

The joint venture produces oil from the production wells on a wellhead platform, Tiro Tiro Moana, and piped to the FPSO Raroa, which is anchored 1.5km away.

The FPSO then offloads the oil to the tankers every few months, facilitating its transportation to refineries in New Zealand and Australia.

Blakeley added: “The Maari Project represented an excellent example of this approach, where we had identified several significant investment opportunities as a result of large in-place reserves and a low recovery factor.

“Unfortunately, the asset is now unlikely to see the type and scale of inward investment that had been planned by Jadestone.

“My thanks go to our team in New Zealand, who have worked tirelessly on the acquisition, transition planning and strategy for extending the life of the asset.”