Dunedin urged to show it can support Shell

Shell country manager Rob Jager says the location for the company's shore operations will be either Dunedin or Invercargill. Photo supplied.
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 required infrastructure.

''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 logical choice.''

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 month.

Dunedin was then being considered as a base for crew changeovers and supplies being taken out to the survey vessel.

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 said.

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 the South.

That could include working with Anadarko, which had a licence in the Canterbury Basin, or other companies with licences in the area.

Ocean conditions were a challenge in the Great South Basin, but conditions in Taranaki were also a challenge, Mr Jager said.

''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 opportunity.''

Drilling in the 1970s and 1980s by Hunt Petroleum made a couple of discoveries but none was found to be viable, Mr Jager said.

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 said.

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 its plans.

''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

dene.mackenzie@odt.co.nz

No need for fossil fuels in our 'hood.

"Those who do not need to use fossil fuels to arrive in Otago" (H Calvert) could be numbered on the fingers of one knee. Not even "eating local" qualifies, not till producers bring their fruit and veg to the Farmers Market on wheelbarrows, not till the spades and rakes and hoes for those who turn to growing their own food are made in Otago from Otago-produced materials. Not till the raised gardens so popular now are made from hand-cut timber and brought to the site on horse or human-drawn carts. Not till the cyclists knit their own tyres from locally-produced flax, and oil them with locally produced mutton fat.

Take full advantage

Dunedin needs to take full advantage of any drilling off our coast. Stop the protesting guys and realize that no one cares apart from a few who in most cases properly don't want jobs in Dunedin because then they may have to work themselves, rather then live off the earnings of others. The Government doesn't care about your opinions they will go ahead and do what they want. So I say get behind Dunedin's bid to make us the base for the drilling. Otherwise Invercargill will ended up NZ's 5th main centre not Dunedin.

temporary

remember the gold diggings.? Desolate land with arsenic flavoured water? Nobody lives there now. What's going to be left of Macraes when they have gone?. Whats going to be left of the Australian economy now the boom's over and they haven't given any thought to innovation, just business as usual? Thank God we have a forward outspoken Mayor who is thinking about the future not eating it up for quick turnover. Maybe you should move to somewhere that is willing to wreck their environment and let Dunedin be the utopia it wants to be.

other options

There are lots of options. It's just that the oil industry wont let any of them become viable. Watch "Whatever happened to the electric car". Anyway there may be many people that are willing to have the oil barons dig up their coastline, particulatly where the companies come from in the first place. Let them wreck their own home and leave ours alone. We would be better off developing our own hybrid vehicle, or find ways of shifting away from the fosil fuel whole deal. We are going to have to eventually anyway.

Have them already

Methods of transport that predate hydrocarbon power are Horsepower, Rowing, cycling and walking aren't environmental friendly alternatives? Yes, He's allowed to do what he likes but principally he's not sticking to them. I See the same with Greenpeace using fossil fuelled boats but I applaud them when they use sailboats.

Ironic indeed

Dav1d

Irony indeed.I saw an old banger the other day with the bumper sticker "Oil Free Otago".......I can't imagine what the driver thought it ran on!  

Realists and protestors

I look forward to Shell's decision and hope they choose Dunedin for its base.  We are in dire need of more industry here and a few wells drilled in the largely empty Southern basin aren't going to affect tourism as Sparrowhawk emotively asserts. Perhaps he/she should visit Europe and see the huge number of offshore oil wells off the coast of the "clean, green" Scandinavian countries, for instance. And our mayor would be better keeping his personal opinions to himself.  I heard him on National radio saying he favours renewable energy, in effect inviting Shell to choose Invercargill.  A very naive statement when everyone currently still needs to use products from large oil and gas companies.  Perhaps the protestors could found a totally green utopia somewhere with no motorised vehicles, plastics, or electrical appliances.  Mr Cull could be their Mayor and the rest of us could get on with our businesses and lives unencumbered by their airy fairy idealistic nonsense.

Oil

Until there is a better alternative, people will continue to use the fuel source that is available, even 'greenies'. However, when an environmentally alternative is available, I am sure your 'long haired' green friend will be the first to take advantage of it. Until that point, his opinion is as valid as anyone else's.  

No need for fossil fuels in our 'hood

"Those who do not need to use fossil fuels to arrive in Otago" (H Calvert) could be numbered on the fingers of one knee.  Not even "eating local" qualifies, not till producers bring their fruit and veg to the Farmers Market on wheelbarrows, not till the spades and rakes and hoes for those who turn to growing their own food are made in Otago from Otago-produced materials. Not till the raised gardens so popular now are made from hand-cut timber and brought to the site on horse or human-drawn carts.  Not till the cyclists knit their own tyres from locally-produced flax, and oil them with locally produced mutton fat.

Another pot of gold at the end of the rainbow

Irrespective of any environmental argument, it will be (in the best oil case) boom then bust, just the same as the news today from Macraes. International companies like this don't care about communities; they'll create a social scrapheap when it's time to go. And go they will. There is no way, socially, economically or environmentally that this is sustainable. But, hey, I'm old. I'll take your short-sighted option.

Drilling for gas in the Southern Basin

Grant Robertson makes an axcellent suggestion when he urges Shell to engage with the local Otago community.

It would be great if we could have the interests of Dunedin, average income $22,300, put to the fore rather than the more likely focus on international opinions of those who have no investment in the life of Dunedin and Otago people.

The concerns of Otago people are the concerns of those who do not need to use fossil fuels to arrive in Otago. 

 

Exploration

This is great news. I hope they find massive amounts of hydrocarbons, God knows this region needs all the economic activity it can get.

 

Irony

I saw a car with a bumper sticker the other day at service station with "No drill, No spill" and "Greenpeace", "Green" bumper stickers all over it. The car left a huge puddle of oil, blue smoke after the friendly long haired guy drove away. So my message to any potential protestors is that you are probably supporting the oil companies at this very minute, if you ride a bike or walk or don't consume plastics, or against the supertanker (that could spill) that comes into NZ once a week then you have every right to be against sea drilling.

No way!

Shell, Anadarko and Petrobras can all get stuffed. No way I want them messing up our coast and ruining our tourist industry. Do they think tourist will want to pass oil rigs into our harbour to look at seals and penguins covered in oil? What's the point in swapping a home grown sustainable industry for an Dutch or American or whatever polluter who will wisk most of the money they earn offshore. Utter stupidity.

 

Excellent news for Dunedin

The City needs large firms to come here so Dunedin can get out of the no change mode.

Let's all get behind Shell and squash the negative nutters who will appear no doubt.

Looking Forward

'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', says David Robinson of the Petroleum Exploration and Production Association.

'We just need to looktowards the impact the oil and gas industry has had on the Gukf of Mexico to know the environmental risks of growing the industry are significant' says nightimejohn, of the Otago Peninsula.

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