Shell country manager Rob Jager says the location for the
company's shore operations will be either Dunedin or
Invercargill. Photo supplied.
Dunedin is being urged to make every effort possible to
ensure Shell New Zealand makes the city its logistics base when
drilling for gas starts off the coast of Otago in 2016.
Otago Chamber of Commerce past-president Peter McIntyre said
Shell, and its joint venture partners OMV New Zealand and
Mitsui E&P Australia, needed to know what they were
getting before they got here.
''We don't want people saying we will provide this or that
when they arrive. They need to know we can supply a port,
access to a hospital and a helicopter pad. They need to know
exactly what they will get,'' he said.
Shell country manager Rob Jager told the Otago Daily Times no
decision had been made on where the company would base its
shore operations, but it was between Dunedin and
Invercargill. The company needed access to a port and
somewhere to land a helicopter.
Mr McIntyre said Southland would surely be ''putting its best
foot forward'' and Dunedin should waste no time showing it
could host Shell.
Shell, OMV and Mitsui announced yesterday it would drill an
exploration well in the northeast part of its Great South
Basin licensed area probably in early summer in 2016.
The JV partners needed to make a decision on drilling by
Friday as part of their licence conditions.
Otago Regional Council chairman Stephen Woodhead welcomed the
news and echoed Mr McIntyre's comments the city needed to
make the best of the opportunity to show it could provide the
''Port Otago has been in communication with Shell and its
partners over the years. Again, there is a long lead-in
period to this, so we are not getting overexcited.
"But we have the mix of a safe deepwater port and an
engineering base in Dunedin. The mix of infrastructure and
expertise in and around Dunedin would make the city the
Mr Jager said in an interview the next two years would
require much hard work before drilling started.
That included getting together the organisations needed to
support the $100 million to $200 million project.
The initial drilling programme would last for three months,
but would be extended if hydrocarbons, or gas, was found.
If gas was found, other wells would be needed to ascertain
how extensive the gas find was and a decision made on whether
to commit to development of the field, he said.
''You need to think 10 years before we are up and running
after a discovery. It's a long-term activity. One well is
just that. It will give up more information and help
concentrate data from our seismic information.''
Shell announced in December it was spending tens of millions
of dollars on a two-dimensional seismic survey starting this
Dunedin was then being considered as a base for crew
changeovers and supplies being taken out to the survey
Shell NZ was fortunate it was part of a huge global
organisation and it could tap into global expertise. However,
drilling rigs had to be booked years in advance, Mr Jager
Only a few rigs capable of drilling in the Great South Basin
were available and Shell would be looking for other
opportunities in the next 12-24 months to keep the drill in
That could include working with Anadarko, which had a licence
in the Canterbury Basin, or other companies with licences in
Ocean conditions were a challenge in the Great South Basin,
but conditions in Taranaki were also a challenge, Mr Jager
''There is not a lot of land between there [Otago] and the
Antarctic and big waves come through. We are exposed to
seismic activity but we know that.
"Globally, Shell has developed deep water operations in the
north North Sea and the Gulf of Mexico. We have got a lot
better at grappling with the elements.
''We are very grateful to the communities of Otago and
Southland for the way in which they have engaged with us so
far. We will ensure that open and honest engagement with all
interested parties continues as the project matures towards
the drilling campaign.''
Shell was aware of the community issues around drilling and
safety was one of the key areas it would undertake during the
next 12-24 months.
''We want our people to go home safely at night and have a
minimum impact on the environment. That's why it takes two
years of planning.''
While Shell expected to find gas during drilling, it was not
a ''slam dunk'', he said.
''The prize is finding enough gas to be able to convert it
into lng [liquid natural gas] and develop an export
Drilling in the 1970s and 1980s by Hunt Petroleum made a
couple of discoveries but none was found to be viable, Mr
Petroleum Exploration and Production Association chief
executive David Robinson said unlocking the petroleum
potential in the Great South Basin could provide benefits not
only to local communities but the country as a whole.
''We just need to look towards the impact the oil and gas
industry has had on Taranaki to know the economic benefits of
growing the industry are significant.''
The expansion of the oil and gas industry in Taranaki had
seen the local economy grow by nearly 50% over four years, he
Shell's announcement sparked a warning from the Greens.
Its oceans spokesman, Gareth Hughes, said his party opposed
all deep sea drilling, as it was too risky.
''This is a particularly risky environment - it's between the
roaring forties and the furious fifties. We saw one of the
world's largest oil companies Exxon Mobil pull out in 2010
because they said the conditions weretoo harsh and the
location remote. Those conditions still exist for Shell.''
Labour MP Grant Robertson said while Labour was ''not opposed
in principle'' to oil exploration, ''we do not believe that
there is currently an adequate regulatory regime or response
capability in place''.
He also called on Shell to engage with the local community on
''With an issue such as this, it is vital that the local
community's voice is heard. We would call on Shell to listen
to the concerns of the people of Otago. - Additional
reporting The New Zealand Herald