NZ 'likely Texas of the south'

NEIL REID
Last updated 05:00 15/01/2012
tdn cheal stand
ANDY JACKSON
TAG Oil's Cheal well site

Relevant offers

An oil exploration company wants to turn the East Coast into the "Texas of the south", writing of the potential to build thousands of oil wells in the largely untouched region of New Zealand.

TAG Oil, which recently sparked controversy by expanding its operations in Taranaki, has told investors in North America the East Coast is "literally leaking oil and gas".

The comments are made in a document the company presented to investors in North America in December.

The 28-page paper – titled TAG Oil: 2011 – A Record Year, which the Sunday Star-Times obtained last week – said the company had identified 1.7 million acres (687,966ha) of "conventional and unconventional targets" on the East Coast of the North Island. There was potential for "billions of barrels" of oil.

"Thousands of sections of land provide potential for thousands of wells," the document said. "East Coast Basin is literally leaking oil and gas."

One of the company's business goals in 2012 was "New Zealand land acquisitions", it said.

It also spoke of having an "aggressive East Coast Basin programme", saying it was "pursuing game changing tight-oil exploration programme targeting massive OOIP [original oil in place]".

TAG's chief operating officer Drew Cadenhead did not respond to messages seeking further comment.

Labour MP Parekura Horomia, who holds the local Maori seat of Ikaroa-Rawhiti, said it was a "known fact" the East Coast region was rich in fossil fuels such as oil and gas.

He said he was staunchly opposed to previously reported plans by a number of companies for oil exploration off the region's coast.

While aware of a scramble among energy companies to secure exploration consents on the East Coast, Horomia was surprised at the magnitude of TAG's proposed on-shore developments.

"This is about the third time I understand they have been through [to survey the area]," he said.

"It is a real clear issue for the iwi who are involved. Some people need to show their hand on what they are doing around this."

Horomia said any decision to grant consent to TAG would have to be balanced against ongoing conservation work in the region.

While many locals would be opposed to the sight of potentially thousands of wells, he said some would back it for the possible benefits to the region's struggling economy.

"There is a lot of anxiety over here about jobs and a lot of our people are going to Australia to mine. We are losing hundreds, literally thousands, of our people who go overseas because of no employment and low wages."

Ad Feedback

Horomia – originally from Tolaga Bay – was adamant that any decision to drill for oil should not be driven by money.

East Coasters had previously given consent for a raft of forestry projects. But with some of the initiatives, financial and employment promises had not been achieved.

"It does beg the question of what is available and who benefits from it," he said of the oil plan.

"Bluntly, we were going into forestry in the 1950s, 60s and 70s at a 3 per cent return on 90-year leases and you don't want that happening again with any opportunities that might come out of oil.

"Forestry has brought some really good opportunities to our district, but I think about what we lost. I certainly don't believe anyone will get the run of just plastering wells wherever they want to."

Revelations about the extent of TAG's East Coast ambitions come after the company's activities in Taranaki drew heated protest in the central North Island region.

A July letter from TAG to shareholders said: "Our excellent drilling success in the Taranaki Basin has encouraged TAG to aggressively move forward with further drilling that will commence in September 2011."

The company has since been controversially granted resource consent to build 18 new wells near the rural community of Ngaere, about 5km south of Stratford.

TAG said last month that the company was ready to further "ramp up" production, describing it as a "game-changer".

- Sunday Star Times

Special offers
Opinion poll

Which way are farmers likely to vote in the 2014 General Election?

National

Labour

Greens

NZ First

Conservatives

Maori Party

Internet Mana

Other

Vote Result

Related story: Farmers weigh voting choices

Featured Promotions

Sponsored Content