Oil-spill partner wins NZ prospect

One of the partners in the Deepwater Horizon oil-spill disaster hopes to be drilling south of Wellington in five to seven years.

But the Green Party and environmental groups warn that, if anything were to go wrong, it could be months before an oil spill could be stopped.

Two exploration permits for adjoining blocks in the Pegasus Basin off the Wellington and Wairarapa coasts have been awarded to United States oil exploration and production giant Anadarko, a 25 per cent partner in the Deepwater Horizon project in the Gulf of Mexico.

An explosion on the rig in April 2010 killed 11 crewmen, and caused the biggest offshore oil spill in US history.

"It's outrageous the Government awarded deepsea oil drilling permits to the very company that was partially responsible for the catastrophic Gulf of Mexico oil spill," Greens energy spokesman Gareth Hughes said yesterday.

He claimed all of Anadarko's profits would go overseas, and the New Zealand public would "pay dearly if anything goes wrong".

However, Anadarko said it was not the operator of the Gulf of Mexico well, and in 20 years of deepwater drilling it had never had a significant incident.

The Government awarded 10 exploration permits yesterday, mainly in onshore and offshore Taranaki, and another east of Dunedin in the Great South Basin, as well as the new Pegasus Basin.

Last week, Brazilian oil giant Petrobras walked away from New Zealand after spending millions on a fruitless search for oil and gas in deep water off East Cape.

Even if a well were to be sunk south of Wellington, it could be at least five years away, at a cost of up to $100 million.

If exploration was successful in the Pegasus Basin, the Government could take up to 45 per cent of the profit in royalties and taxes.

Anadarko is hoping to find about 150 million barrels of oil. Its drilling rigs could be as close as 25 kilometres from shore, or up to 100km away.

The Gulf of Mexico disaster cost the US economy more than US$40 billion (NZ$47.8b) and caused an area twice the size of the North Island to be closed to fishing for months, Greenpeace says.

"Such an impact on New Zealand's fishing and tourism industries would cripple the country and destroy [its] clean and green international reputation," said its NZ climate campaigner, Simon Boxer.

John Gordon, Anadarko exploration manager, Asia Pacific, said the company had been a passive investor in the BP well. "At no time did Anadarko have any input or say in the operation of the well in the planning or execution."

It settled with BP by paying it US$4b, though there was no legal ruling which forced that.

Asked what assurance it could give about drilling in deep water, Mr Gordon said: "Anadarko has been doing the same for 20 years. We have done so with a very successful safety record and without a major incident in that time."

But Environmental Defence Society chairman Gary Taylor said there should be no drilling until a permanent consent regime was in place.

One of the criteria for considering consents should be corporate reputation: "Anadarko does not have a good reputation."

Neither Wellington City Council nor Greater Wellington regional council was consulted about the exploration permit, but iwi groups were.

Regional council chairwoman Fran Wilde said: "All local government would have liked to have known about it earlier than we did."

Wellington Labour MPs Grant Robertson, Trevor Mallard and Annette King said they were concerned whether rules and standards for deep-sea exploration and drilling were sufficiently robust.