Ten new exploration permits awarded

JAMES WEIR
Last updated 13:08 05/12/2013

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Norwegian oil giant Statoil and Australia's biggest independent oil company, Woodside, are joining the hunt for oil and gas in New Zealand.

And small Southeast Asian company Mont D'Or is the third new overseas company to start exploring in New Zealand.

The Government awarded 10 new oil and gas exploration permits today as a result of this year's "block offer".

Statoil was awarded an offshore Northland block to explore, known as the Reinga-Northland permit, about 300 kilometres northwest of Auckland, starting about 100km off the Northland coast.

Statoil's exploration permit runs into water which is as much as 2500 metres deep, far deeper than Anadarko's deep water exploration well now under way off the Taranaki coast.

Woodside has teamed up with locally owned company New Zealand Oil & Gas to explore an area in deep water off the Taranaki coast, and has committed to new 3-D seismic work.

Woodside and NZOG are also partners in an area of the Great South Basin southeast of Invercargill.

Combined, all the explorers have committed to spend about $62 million on early stage exploration in the 10 permit areas.

If successful that could lead to more New Zealand exploration work worth up to $720m.

Offshore well drilling depends on initial exploration work and it could be several years before the companies make a decision to drill wells that can cost tens of millions of dollars each.

The committed exploration spending is down on last year's block offer total of $82m, but this year's spending involves more offshore exploration work.

Energy Minister Simon Bridges said the results of the block offer showed New Zealand was "firmly on the map" for oil and gas explorers.

Petroleum Exploration and Production Association chief executive David Robinson said the block offer had brought investors and operators with "vast experience" to New Zealand.

"They are regarded as the best in the business" and operated to the highest standards, Robinson said.

But the Green Party said the Government was "putting our beaches at risk of an oil spill by today awarding four new permits to mainly foreign-owned companies for deep sea oil exploration".

Statoil's profits form a pension fund.

"The Government is risking our environment and our economy to pay for Norwegians' pensions," said Green Party energy spokesperson Gareth Hughes.

The permits were announced during one of the biggest oil and gas exploration drilling seasons in New Zealand, with 13 wells being drilled offshore and about 30 onshore. The industry was expected to spend between $600m and $755m on that work.

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The biggest new arrivals to New Zealand are Statoil and Woodside and both plan to look for oil and gas in deep water.

Statoil has committed to some seismic testing and, going well, could carry out further testing, but any decision to drill an exploration well is expected to be some years away.

Statoil is majority owned by the Norwegian Government with 67 per cent and is one of the biggest companies in the world, with about 23,000 staff globally.

Woodside has about 4000 staff and has large interests in Australia and around the world.

Mont D'Or is a privately held company based in Singapore, with just 50 staff, and small production and exploration interests in Indonesia.

New Zealand Oil & Gas on its own, also picked up a permit to explore a block off the Otago coast northeast of Dunedin.

Other permits were picked up by Australian company Octanex (one offshore Taranaki permit), Australian firms AWE and Mitsui Australia (one onshore Taranaki permit), Tag Oil (one onshore Taranaki permit), Eastern Petroleum (part of Tag Oil) and East West Petroleum (one onshore East Coast permit) and Greymouth Petroleum offshoot Petrochem, (one onshore Taranaki permit).

- Fairfax Media

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