New exploration permits awarded

Shell has acquired another exploration block in the Great South Basin, which will likely push the cost of its hydrographic seismic survey work in recent years beyond $100 million.

South Canterbury Basin explorer Anadarko, which hopes to test drill off Oamaru, has secured two permits in the Pegasus Basin, southeast of Cook Strait.

Shell, and partners OMV and Mitsui, have spent about $80 million in 2-D and 3-D seismic surveying in the Great South Basin, and have taken up another permit and committed to a new 2000km 2-D seismic survey, with contingencies to later decide on 1250sq km of 3-D seismic surveying and an exploration well.

Shell expects to make a decision within 12 months on drilling in the Great South Basin.

Shell New Zealand chairman Rob Jager said the new permit offered Shell a larger explorable area ''and therefore a greater upside in case of [exploration] success''.

Government permit agency New Zealand Petroleum and Minerals yesterday released the names of the successful applicants for the 2012 onshore and offshore block offer.

Seven permits were awarded in the Taranaki Basin, two in the Pegasus Basin and one in the Great South Basin.

Green Party energy spokesperson Gareth Hughes accused the Government of ''gambling'' with the environment and economy, in awarding further blocks to Anadarko.

Anadarko New Zealand, a wholly owned subsidiary of Anadarko Petroleum Corp, had a 25% stake in the Deepwater Horizon disaster in the Gulf of Mexico in 2010.

''It's outrageous that the Government awarded deep sea oil drilling permits to the very company that was partially responsible for the catastrophic Gulf of Mexico oil spill,'' Mr Hughes said.

There were 24 qualifying bids for 13 of the blocks tendered, particularly around the Taranaki region, bids coming from the Netherlands, Austria, Canada, the US, Australia and Japan and domestic companies, Minister of Energy and Resources Phil Heatley said in a statement.

''This is essential if we are to realise the potential of our petroleum resources for the benefit of the whole country,'' he said.

Collectively, the permits represent committed work programme expenditure of $82 million which, if successful, could lead to a further $776 million of spending within five years.

''It's pleasing to see ongoing development of portfolios by established operators including big players such as Shell, OMV and Anadarko,'' Mr Heatley said.

Petroleum Exploration and Production Association chief executive David Robinson said the block offer had been a success, with more than $700 million dollars to be invested in New Zealand during the next five years.

OMV New Zealand has announced the commitment of the semisubmersible drill rig Kan Tan IV for a 90-day drilling programme offshore at Taranaki, expected to begin by the third quarter next year.



Successful applicants


Houston-based Anadarko: Two (Pegasus Basin).

Shell, OMV and Mitsui: One (Great South Basin).

Todd Exploration and Cue Taranaki: One offshore (Taranaki Basin).

New Zealand Oil and Gas: One offshore (Taranaki).

Cheal Petroleum and East West Petroleum: Three onshore (Taranaki).

TAG Oil: One onshore (Taranaki).

NZ Energy Corporation and NZ Oil and Gas: One onshore (Taranaki).

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