Billion-barrel Taranaki oil hope

Last updated 00:00 15/08/2007

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A potential oil field far off the Taranaki coast could hold as much as 1.6 billion barrels of oil, according to an exploration company.

The oil would be worth up to $150 billion at present prices.

A detailed study of information from the Deepwater Taranaki Basin suggests one possible structure, called Romney, could hold between 1.1 billion and 1.6 billion barrels of oil, according to report yesterday from explorer Global Resource Holdings.

That would be a huge field, though there is no certainty of a find till a well is actually drilled.

This may not happen till 2009-10, and development costs would be extremely high.

Global has estimated that a field development would be economic if it discovered 100 million recoverable barrels of oil.

That is about three times the size of the new offshore Taranaki Tui field, which is much closer to shore and has just started to produce oil after development costs of about $500 million.

Such prospects are seen as long shots that would be expensive to drill and develop, though technically possible.

Reports earlier in the year indicated there were a dozen prospects in the Deepwater Taranaki area that could each contain up to 500 million barrels of oil. Romney, about 150 kilometres offshore, is much bigger than that according to the latest, more detailed study.

At the extreme, Romney could hold as much as 2.7 billion barrels, Geological and Nuclear Sciences Institute senior geophysicist Chris Uruski said.

A barrel is equal to 159 litres.

He estimated a "15 per cent chance of success" based on present work, which was "quite reasonable".

"But the more we know about the area, the better the odds become," he said yesterday.

The geology suggested a good chance of an oil reservoir, though he admitted there was no certainty till a well was actually drilled.

New seismic data planned for early next year should reduce the risks.

Oil sells for just more than US$70 (NZ$95) a barrel on world markets, indicating a value of just one field of up to $153 billion. Romney could also contain 2.7 trillion cubic feet of gas, according to the study carried out by GNS Science.

That would be about half the size of the giant Maui gas field. In Norway, pipelines have been run about 300km from offshore gas fields.

The Deepwater Taranaki prospects have been named for New Zealand sheep breeds such as Romney, Corriedale and Merino. The Romney structure lies in 1600 metres of water and is about 200 square kilometres.

It was "well placed" to get oil and gas seeping from nearby "kitchens" deep underground.

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The study summary was released by Global Resource Holdings, which holds the oil exploration permit for the Deepwater Taranaki Basin.

Global has no partners for the project yet, but plans to talk to potential partners at an oil exploration conference in Perth in a fortnight.

"I think interest is going to be pretty reasonable," Mr Uruski said, with oil now about US$70 a barrel.

But a high price for oil also meant more projects became available for companies to consider.

Texas company Global Resource Holdings specialises in attracting interest from large explorers and does not have the financial muscle to drill for oil itself.

Global holds the licence for five years, from October last year, so big companies would need to work in partnership with it.

The deepwater Taranaki Basin's prospects are similar to the Great South Basin, south of the South Island, but with better weather and established infrastructure in Taranaki.

The Coopworth structure, which is near Romney, "may be charged with 350 to 540 million barrels of oil" and up to 1 trillion cubic feet of gas.

Coopworth is in about 1400 metres of water.

Corriedale, in 230 metres of water, may contain 180 million to 280 million barrels of oil, but little gas.

Global Resources said it now planned a two dimensional seismic survey early next year to get more precise mapping of the known prospects and leads, and to confirm prospects in the Merino trend.

- The Dominion Post

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