Tararua area in for gas, oil exploration
A chunk of Tararua measuring about 1341 square kilometres has been opened up for oil and gas exploration.
Energy and Resources Minister Simon Bridges launched the third annual block offer for exploration at an industry conference in Wellington yesterday.
The area, adjoining existing permitted areas and extending from south of Norsewood to south of Pahiatua and along the ranges, was one of eight release areas.
Tararua Mayor Roly Ellis said he had not heard of any company expressing interest in the area yet, although he expected there would be interest.
Whether exploration would benefit the district would depend on the details.
"There are going to be pluses and minuses depending on where they want to drill, really. We wouldn't want them drilling into any aquifers and that sort of thing," Ellis said.
"But I think we really need to wait and see what comes up."
Bridges said oil, worth about $1.8 billion in 2012, was the country's fourth-largest export.
"The Government receives around 42 per cent of the profits, or approximately $700 million each year. This money is invested back into our communities in key infrastructure projects like schools, roads and hospitals.
"But we have barely scratched the surface of our potential.
"If just one more of our 18 basins was opened for production, like Taranaki, it would be an economic game-changer for our nation.
"That is why the Government will continue to work hard to attract major international companies to invest in petroleum exploration and development in New Zealand."
Ellis said oil was "not a one-minute wonder" and he did not expect to see high levels of production in the district any time soon.
"I think it's going to be slowly, slowly. I don't think we'll ever get into the amount of production that's come out of Taranaki for a long, long while.
"There's been no rush over the whole thing, despite what one or two people say. I think they have to take it fairly slowly and see what there is.
"It costs a vast amount of money to put one of these wells down. Nobody's just going to go and drill willy-nilly. There's a lot of research going on."
Tag Oil, which has an exploratory well near Dannevirke, said in February an independent reservoir characterisation study had confirmed oil was being generated in the Whangai source rocks.
Chief executive Garth Johnson said last month the company planned to flow test the well by the middle of the year to determine what quantities of oil, gas or both flowed out of the well.
The company would expect to know if the well was commercially viable within weeks of testing.
The other two onshore release areas announced yesterday were in the Taranaki Basin and West Coast Basin.
The offshore release areas were in the Reinga-Northland, Taranaki, New Caledonia, Pegasus-East Coast, Great South and Canterbury basins.
The invitation for bids closes on September 25 and permits are expected to be granted in December.