Great South Basin in block offer

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The Great South Basin, off Otago and Southland, is in the Government's latest tendering round for oil and gas exploration, which covers more than 400,000sq km, both on and offshore around the country.

The 2014 block offer was announced by Energy and Resources Minister Simon Bridges yesterday, and he also invited nominations from the oil industry on which blocks they would like to see offered for 2015 tendering.

Mr Bridges said while New Zealand needed to reduce carbon emissions from its energy use and respond to climate change, in the transition to a low-carbon economy ''fossil fuels will remain an important part of the mix''.

''Oil and gas will continue to play a key role in ensuring our energy supply is reliable and affordable,'' he said in a speech at the Advantage NZ 2014 Geotechnical Petroleum Forum in Wellington yesterday.

For 2014, there are onshore areas in the East Coast, Taranaki and West Coast basins, and the offshore areas are in the Reinga-Northland Basin, Taranaki Basin, New Caledonia Basin, Pegasus-East Coast Basin, and Great South Basin and Canterbury Basin.

Mr Bridges said oil and gas exploration had ''barely scratched the surface of our potential''.

''If just one more of our 18 [prospect] basins was opened for production, like Taranaki, it would be an economic game-changer for our nation,'' he said in a statement.

Oil exports in 2012 were worth about $1.8 billion, with the Government getting about 42% of profits, or about $700 million each year, he said.

The Government would continue to work hard to attract major international companies to invest in petroleum exploration and development in New Zealand.

While outlining all the areas under offer, including the West Coast of the South Island for the first time, Mr Bridges said the Great South Basin and Canterbury Basin were prospects for oil and gas and discoveries dated back to the mid-1970s and to the 1980s. The two southern areas for offer cover 141,755sq km.

''It has a long demonstrated active petroleum system that has been the subject of renewed interest since 2007,'' Mr Bridges said.

Test drilling was undertaken by the rig Ocean Patriot, off Oamaru, in 2006 for Australian company Tap Oil and partners, with no commercial finds. Texas-based Anadarko drilled one test well in February this year, using the drill ship Noble Bob Douglas. Results are pending.

Australian-listed company Origin Energy and New Zealand Oil & Gas hold separate permits in the southern areas, which could eventuate in drilling. Shell and joint venture partners OMV and Mitsui hold another permit. The 2014 tender closes on September 25 and successful bidders will be announced in December.

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