Drilling holds promise of job bonanza
The decision to drill for natural gas in the Great South Basin could potentially bring thousands of jobs to the southern region, Shell New Zealand's chairman says.
Rob Jager said the company's Taranaki operations in the Maui gas field employed more than 400 staff and he understood it was responsible for another 7000 flow-on jobs.
It was hoped the reservoir Shell would explore in the Great South Basin would be even bigger than the one in Taranaki.
It was unclear how many people Shell would need to hire for exploration in the basin, but if it led to gas production, thousands of flow-on jobs could be generated in Southland in years to come.
Venture Southland enterprise services manager Alistair Adam said the Southland Energy Consortium had been working with the Southern Institute of Technology to ensure Southlanders would have the skills to fill potential jobs.
"It's about getting the timing right. There would be no point in delivering those courses when full-scale production might not go ahead." Mr Adam said the oil and gas industry would attract more people to the region.
"I think Southland has a good track record of delivering large-scale projects such as Tiwai."
Venture Southland, South Port, and the Southland Energy Consortium, which represents businesses focused on the energy and exploration support industry, would keep in contact with Shell to ensure Southland could meet any requirements.
Mr Jager said there would not be a great need to set up a large base near the basin because parts of the operation could be run from Taranaki.
However, some form of support base would be needed in either Otago or Southland for the first exploration well, with the location yet to be decided. "Support activities will need to be based locally, including a helicopter supply base, caterers, and supply boats."
Drillers, technicians, and a drilling contractor would also have to be employed, he said. Then there was the rig itself.
"There can be two to three hundred people on a rig at any one time," Mr Jager said.
The $200 million exploration well is expected to be operating for about 40 days in the summer of 2016. Shell would analyse data collected from the well before taking the next step.
"If we find something, we will then decide whether to start appraisal drilling, which could involve more holes and more wells to get a fix on how big the reservoir is, how much gas is there, and how quickly it comes out of the ground."
Mr Jager said though Shell was sure there was gas in the basin, there was no guarantee it would be economically viable to extract it.
"There could be a lot of gas, but if it doesn't come out of the ground easily it may not be economic to continue if you have to drill more and more holes."
Mr Jager said the process would take time because every new well and rig could take another two years of preparation.
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