OMV confirms plans to drill off Otago coast

The one-off gas exploration well will cost around $80 million. PHOTO: ODT FILES
The one-off gas exploration well will cost around $80 million. PHOTO: ODT FILES
Austrian oil giant OMV has confirmed it will be arriving off Otago's coast this summer to drill a one-off oil and gas exploration well costing around $80 million.

Given the rigorous reception meted out by southern environmentalists at last month's miners' Minerals Forum in Dunedin, there are expectations of a staunch reception for the oil rig.

The self-propelled COSL Prospector oil rig is at present being used in Taranaki but was confirmed yesterday to be headed to the Great South Basin, just to drill the Tawhaki-1 well, about 146km southeast of Balclutha.

No arrival dates have been confirmed.

There was talk in April of up to three exploration and seven follow-up appraisal wells, but when an OMV spokesman was contacted yesterday he said only one exploration well would be drilled.

"The success rate for the industry is only around 15%. It's likely we won't find anything," he said, citing the costs of preparation and planning for multiple wells.

While OMV had drilling sign-off from the Environmental Protection Authority (EPA), one Taranaki prospect and the Tawhaki-1 are yet to gain authority approval.

While the EPA will consider OMV's detailed Great South Basin drilling plans without public input, a legislative technical anomaly covering the Exclusive Economic Zone means a public hearing will be held in Dunedin late this month.

That will consider the potential for immeasurably small trace quantities of potentially harmful substances that may, if spilled, end up washing off the deck of a drill rig through its rainwater run-off systems, BusinessDesk reported.

OMV and partner Mitsui have been exploring in the Great South Basin for 12 years but are yet to drill a well.Their 16,715sq km permit, extended by the Government last year, expires in July 2022 and requires the drilling of a well by July 2021. If that drilling is successful, the permit can be extended out to 2030, but would also require the drilling of two further wells by July 2022. - Additional reporting: BusinessDesk

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