Nine oil and gas permits awarded

Taranaki's oil and gas basins were the focus for exploration in the Government's block offer tender round for 2015, with nine onshore and offshore permits awarded in Taranaki this week.

Confirmation of the tender process comes less than two weeks after the Paris climate talks.

Prime Minister John Key was criticised by environmentalists for talking up New Zealand's commitment to climate change, while offering New Zealand permits for exploration, and for awarding $10million to GNS Science for four-year research programmes, in July.

The Great South Basin, included in the 2015 block offer, did not attract any bidders, nor did Pegasus, off Wairarapa or the Northland-Reinga basins.

A year ago, 15 permits were issued to nine companies.

The lack of bids reflects exploration world-wide, curtailed by low oil prices, touching seven-year lows last week below $US40 ($NZ59) a barrel.

Shell, which postponed drilling off Otago's coast in October, has all its New Zealand assets under review, which in the extreme could include a complete sell-off.

Houston giant Anadarko could test drill within two years and New Zealand Oil & Gas is seeking a joint venture partner; with both prospects in deep water off Oamaru's coast.

Royalties to the Government last financial year declined by about $100million to $258million.

Minister of Energy and Resources Simon Bridges announced the successful tenders on Wednesday, noting the permits collectively include a committed work programme expenditure of $4.4million, with the potential of more than $364million being spent, if all contingent work was realised.

He acknowledged some had questioned the Government's commitment to the block offer and petroleum exploration, suggesting the Government should embrace the fall in commodity prices as part of a general push towards renewable energy.

"I am committed to a mixed and balanced approach to our energy potential, and will continue to pursue an "all-of-the-above'' policy as New Zealand and the world transitions towards a low-carbon future."

Green Party energy spokesperson Gareth Hughes was scathing of the permit announcement, saying it was only a few days since Mr Bridges, the Associate Climate Change Minister, had returned from the Paris conference, and he had now given out oil exploration permits and opened a big new highway designed for trucks.

"We haven't seen any commitment by this Government to actually making any changes that would lower New Zealand's carbon pollution, in fact we've seen the opposite,'' Mr Hughes said.

With oil royalties down significantly and major oil companies leaving the country, delaying exploration, and not bidding for new permits, it was time for National to quit subsidising the oil industry to find oil we could not afford to burn, Mr Hughes said.

● The 2016 block offer closed in October, with awards to be made in March.

The areas open for 2016 include onshore Taranaki, plus the offshore basins of Taranaki, Pegasus and East Coast, Northland-Reinga, Great South and Canterbury.

simon.hartley@odt.co.nz

 

 


Successful tenderers

 OMV NZ: four offshore Taranaki permits; in partnership with Mitsui E&P Australia Pty.

Todd Exploration: one offshore Taranaki permit.

Mont D'Or Resources: one offshore Taranaki permit.

Petrochem: three onshore Taranaki permits.


 

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