Positive results from test drilling, such as from Kan Tan
IV, pictured four years ago with two supply vessels and
which arrived back in the country a month ago, could result
in New Zealand being re-rated as a more favourable place to
explore for oil and gas. Photo supplied.
Up to three drilling rigs and a drill ship are due in New
Zealand over the next 12 months and, depending on results, the
country could be ''re-rated'' as a more favourable destination
for oil and gas explorers.
New Zealand Oil and Gas chief executive Andrew Knight, who
was in Dunedin this week, said the four rigs would drill up
to 12 holes.
''This is an exciting time for us and the industry if we can
secure some investment back into the [oil and gas
exploration] industry,'' he said when contacted yesterday.
Much of New Zealand's 10 wider seabed basins are considered
high-risk frontier territory and with shale oil discoveries
and increasing fracking onshore, investment interest could
Data from the report released this week by the Ministry of
Business, Innovation and Employment tells two tales of the
oil and gas sector.
Oil exploration and development expenditure was up at
historic levels, totalling $8.3 billion for the six years to
2012. The second-highest annual spending, $1.47 billion, was
in that year and overall drilling activity was the highest in
Although offshore drilling had waned to just two holes in
2011, this year expectations are for 13 holes offshore and 27
However, oil production fell 13% last year, from 2011 levels,
its lowest for the past five years. Petroleum royalties were
down to $333 million last year, but during the past five
years totalled $1.8 billion in revenue for the Government.
Mr Knight believed that 10 to 12 wells could be drilled
during the coming year, including some ''workover'' wells to
replace existing wells, as opposed to new exploration.
''If two of the 12 wells come in [with positive oil and gas
shows], New Zealand could be re-rated as an investment
decision, which in turn reduces costs for the industry,'' he
New Zealand has 10 main exploration basins, further defined
into numerous smaller basins, most of which are unexplored,
with Taranaki producing oil from 19 fields. It is exported
for refinement, being of higher quality than the imported oil
used at Marsden Point.
The semi-submersible rig Kan Tan IV has already
arrived in the country, new drill ship Noble Bob
Douglas is scheduled to drill off Taranaki and Otago,
Ensco 107 is scheduled to come here within a year and
a fourth, jack-up, rig could also come to New Zealand.
Mr Knight said the country's oil and gas explorers, both
domestic and internationally based, worked collaboratively
and could schedule their respective uses of hydrographic
vessels, drilling ships and rigs to reduce costs.
The costs of hydrographic vessels, which undertake seismic
testing at sea, can run to $US250,000 ($NZ317,000) a day.
Drill rig costs start at $US30 million for one shallow water
drilling programme, or more than $US100 million for a
deep-water programme. Kan Tan IV arrived in New
Zealand in mid-August, and was being readied for towing to
the offshore Taranaki Matuku field, which is west of the
mature offshore Maui gas field and southwest of the Tui
field. OMV New Zealand has a 65% holding in Matuku, Octanex
NL 22.5% and NZOG 12.5%, according to NZResources.com.
Moored in 135m, Kan Tan IV is expected to drill to
4850m at Matuku before moving to other Taranaki drill sites.