The first taste of petroleum money could be just weeks
away in Dunedin, as Texas-based oil giant Anadarko prepares to
move its state-of-the-art drilling ship into Otago waters, it
has been confirmed.
A natural gas boom worth billions of dollars to the regional
economy could follow in the ship's wake, with thousands of
jobs potentially created across Otago, it has been suggested.
As arguments for and against the industry's arrival in
Dunedin continue, a report by economic analyst Berl has
outlined the possible regional benefits of an oil or gas
strike anywhere in the South Island.
It calculated a large offshore gas field could be worth $8.1
billion to the economy of any region hosting the industry,
and $3.1 billion in regional GDP, while creating 11,540 jobs.
The report was prepared in March 2012 for the Ministry of
Economic Development, but had not previously been seen by
Dunedin Mayor Dave Cull.
He told the ODT yesterday the report did not allay
public concern about fossil fuels and climate change, but the
economic benefits - if applied to Dunedin or Otago - would be
''more than significant''.
''It could be a game-changer in terms of the economy.''
His comments came as Anadarko New Zealand corporate affairs
manager Alan Seay confirmed the company's exploration ship,
the Noble Bob Douglas, was due in Otago waters by the
end of the month.
The company planned to begin drilling a test well 60km off
the coast of Otago Peninsula, at the bottom edge of the
Canterbury Basin, early next month, in search of a viable
natural gas field, he said.
The ship would be serviced initially from the company's base
in New Plymouth, but crew rotations, food and other
consumable items would be ferried to and from the ship by
helicopter from Dunedin, he said.
A joint venture comprising Shell, Austrian giant OMV and
Mitsui, of Japan, also planned its own test well in the Great
South Basin, most likely in the early summer of 2016-17.
The companies were yet to decide whether to site a logistical
base in Dunedin or Invercargill.
However, if one or both fields proved to be viable and full
production ensued, the economic benefits for Dunedin, Otago
and New Zealand could be ''enormous'', Mr Seay said.
''The uplift from a large discovery offshore of Otago would
be enormous for the regional economy and for the country as a
The Berl report's analysis was based on a hypothetical gas
field located well offshore, with 30 production wells, a
45-year lifespan, and with gas processed offshore before
being shipped directly to overseas markets.
The report anticipated total spending would reach $19.2
billion during the development, operation and decommissioning
of the field, the majority of which - spent to develop the
field and build a floating liquefied natural gas facility -
would go to overseas companies.
However, $8.1 billion, or $179 million each year, would be
spent within the regional economy, generating 11,540
full-time equivalent jobs, it said.
Total spending and the benefit for the local economy would
peak during the field's appraisal and development phases,
again during any second round of drilling, and finally during
the field's decommissioning.
At other times, there would be a steady level of employment
and local economic benefits during the production phase, it
A subsequent report by the Ministry of Business, Innovation
and Employment, published in August 2012, said regions
involved would benefit through ''job creation, higher wages,
higher demand for local goods, services and capital, and new
investment in the region''.
That was despite some skills and specialist equipment
necessary to develop the oil and gas industry in new regional
centres needing to be imported initially.
Over time, regions would develop their own pool of expertise,
and those with ''unproven'' oil and gas potential could
benefit from ''many millions of dollars of new investment'',
Petroleum Exploration and Production Association of New
Zealand chief executive Dave Robinson sounded a note of
caution when contacted by the Otago Daily Times.
He said the number of variables in the hunt for a
commercially-viable gas field meant it was difficult to be
specific about potential economic benefits, and failure
remained the most likely outcome.
However, the type of returns detailed in the Berl report were
''absolutely not pie in the sky'' for Dunedin and Otago, he
''One of the absolute black and white realities of the
petroleum sector is if you have a petroleum industry, it is
very meaningful from a revenue and economic point of view, in
the region in which it occurs and for the country that
''These sorts of resources are highly sought-after all around
''Any nation that has petroleum tries to develop them,
because they are very, very lucrative for the countries that
Mr Cull said despite the potential economic benefits,
environmental concerns would remain.
Accidents could come in many forms, from a rig explosion to a
shipwreck, and there was ''a whole lot of scenarios that
don't involve a blow-out like [the Gulf of Mexico]'', he
Risks could be managed ''to a large extent'', but climate
change could not, if the hunt for fossil fuels continued
unabated, he said.