Australian Worldwide Acts to Avoid Further Oil Leak

Australian Worldwide Exploration Ltd. (AWE), operator of the $269 million Tui oil project in New Zealand, said it took ``immediate measures'' to avoid a repeat of an oil leak from the venture.

The venture accepts that degraded oil that last month washed onto a beach off the North Island coast resulted from a discharge of oil-contaminated water on Oct. 21 from the production vessel used at the project, the Sydney-based company known as AWE said today in a statement to the Australian Stock Exchange. Production hasn't been affected, it said.

Taranaki Regional Council said Oct. 24 it began cleaning up oil that washed onto an estimated 10 kilometers (6.2 miles) of the coast and was investigating the source of the oil. Tui, New Zealand's first offshore oil project in 11 years, which started up in late July and produces more than 40,000 barrels a day, lies about 60 kilometers from the affected area.

``The integrity of the production wells and facilities is not in question,'' the company said in the statement. ``AWE is co-operating fully with Maritime New Zealand and the clean-up costs will be met in full. These costs are not expected to be material.''

The maritime authority will decide on whether it will take further action over the leak, it said.

Australian Worldwide fell 2 cents, or 0.7 percent, to A$2.98 in Sydney trading on the exchange.

Mitsui & Co., New Zealand Oil & Gas Ltd. (NZO) and Pan Pacific Petroleum NL (PPP) own stakes in the venture.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net

To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net

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