Oil rig Ocean Patriot which visited the Canterbury Basin,
off Oamaru, in late 2006 and test-drilled for oil and gas.
Exploration of the Great South Basin for oil and gas may
be revived, with four offshore blocks near Dunedin among 23
onshore and offshore areas formally put out to tender by the
Previously permitted blocks in the frontier Great South Basin
in 2007 attracted oil giants Shell, OMV and Exxon, but the
latter departed about 18 months ago and a Shell and OMV joint
venture could take up to two years to decide on whether to
test-drill, having recently finished $50 million of
ship-borne seismic surveys during the past five years.
While there are two blocks on offer in the overall grid of
the Great South Basin, there are two other blocks north of
Dunedin near Oamaru, where Houston-based Anadarko Petroleum
wants to test-drill.
However, Anadarko's offshore drilling programme next summer,
estimated to cost more than $US100 million ($NZ124 million)
will probably be postponed because of a global shortage of
Both Shell and Anadarko in recent months have increased their
corporate presence around the South Island, but neither would
confirm they would be actively involved in tendering.
Offshore, all the blocks around the country cover 40,198sq km
of seabed and onshore 3305sq km of land in Waikato, Taranaki,
Tasman, West Coast and Southland. The competitive tendering
process for the blocks closes in mid-October.
The potential for deep-water drilling in New Zealand is
becoming an environmental flashpoint and attracting public
attention. Both the Great South Basin and adjacent Canterbury
Basin are in the deep-water range, well beyond depths of
The Green Party is concerned deep-water drilling could see a
repetition of the Gulf of Mexico oil spill, while the
Government has the oil and gas sector high on its priority
list of underpinning an export-based recovery.
Petroleum Exploration and Production Association of New
Zealand chief executive David Robinson, said opening the
tendering round was just the start of a process to establish
whether the blocks had any oil and gas reserves, noting
production from a successful discovery would be at least five
"Any company winning one of these blocks will be required to
operate to the highest standards of health and safety.
"We only welcome quality operators to New Zealand. It is very
important to the industry that New Zealand's pristine
environment is safeguarded," he said in a statement.
• The Great South Basin was last drilled by Hunt Petroleum,
which sank eight test wells in the 1970s and '80s.
Test-drilling off Oamaru was undertaken by Ocean Patriot in
November 2006, but results were not considered commercially