$15m push for seismic data

Associate Energy minister Harry Duynhoven
Associate Energy minister Harry Duynhoven
Government oil and gas permit granting agency Crown Minerals appears set to seek a second tranche of more than $15 million to undertake further seismic data gathering programmes in its effort to promote New Zealand to overseas petroleum explorers.

It has spent $15 million allocated by the Government, largely on gathering data from the Great South Basin and more recently Raukumara Basin, off the East Cape of the North Island, which updates and improves historic data made freely accessible for oil explorers.

About $5 million was spent on the Great South Basin, entailing 3500sq km of seismic surveying, while about $4 million was spent on 1200sq km of data over the Raukumara area, with the balance spent on further processing of that data.

Government ministers believed the Great South Basin mapping by Crown Minerals was a key ingredient to two major consortiums successfully tendering for eight blocks in the southern basin.

In July last year it was announced the pair had committed up to $1.2 billion for exploration during the next five years.

Raukumara basin blocks are expected to be put up for open tender by late this year and given the positive outcome of the Great South Basin tender process, Crown Minerals will be hoping major consortiums take a similar interest in the northern deep water prospect.

Associate Energy Minister Harry Duynhoven confirmed to the Otago Daily Times, at the biennial Petroleum Conference in Auckland this week, negotiations were under way for Crown Minerals to receive another tranche for data collection.

Earlier criticism of Government strategy and policy at the conference prompted Mr Duynhoven to say the outcome of the Great South Basin survey by Crown Minerals - gaining a $1.2 billion exploration commitment - had been spectacularly successful for the agency.

Based on the value they got, they would be asking for more than the previous $15 million this time, Mr Duynhoven said.

The $1.2 billion in exploration was double what was being spent around the entire country on exploration now.

Mr Duynhoven said negotiations were already under way, but the minister declined to put a value on the application. Mr Duynhoven was also not prepared to put a timeframe on the application.

Instead, he highlighted that the fiscal requirements for the budget in May were currently under consideration.

The final decision on any second tranche for Crown Minerals would ultimately be the decision of Finance Minister Michael Cullen, Mr Duynhoven said.

While there were some industry sources who were concerned that the imminent budget and election this year would politicise the issue of a second tranche of cash for data upgrading, others remained confident that ministers associated with energy had the ear of Dr Cullen and they believed Dr Cullen would ‘‘rubber stamp'' the proposal.

Mr Duynhoven declined to enter into that speculation, but said changes to the royalty regime and tax incentives made up only a small proportion of incentives for oil companies, compared to the extremely good value of having Crown Minerals funded to produce more seismic data.

The Great South Basin consortiums led by ExxonMobil and OMV New Zealand, have completed the majority of their own seismic ship surveys, in conditions described by operators as near perfect this summer, compared to earlier surveys repeatedly interrupted and hampered by hazardous weather.

However, it is likely to be at least 18 months before data analysis by the consortiums is complete and any definite results emerge.

- Simon Hartley attended the conference courtesy of Crown Minerals.

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