Seismic tests set to start
Southland leaders met with Shell New Zealand yesterday on the eve of the oil giant's extended seismic foray into southern waters.
SouthPort chief executive Mark O'Connor, who is also chairman of the Southland Energy Consortium, said Shell representatives briefed Southland stakeholders on further seismic testing it was planning to carry out in January in the Great Southern Basin.
Seismic surveys are used to image the sub-surface strata deep below the sea floor.
Shell NZ has already completed some seismic testing within its 25,000 square kilometre exploration permit area awarded to it by the Government in December 2012. Those surveys turned up two potential "natural gas accumulations of interest" which Shell NZ wants to explore further, according to the company's latest reports.
The exploration area lies off both Southland and Otago coasts, opening up the question of where Shell NZ is likely to have a base during operations. A Shell NZ spokesperson said that decision was yet to be made.
Otago Chamber of Commerce and Dunedin City Council representatives have expressed confidence that Dunedin's Port Otago would be a top contender as the company's base during the seismic survey.
Mr O'Connor said SouthPort was "pretty relaxed" with that scenario. Oil company operations during seismic surveys did not pose high economic benefits, he said.
Stakeholders also accepted Dunedin was closer to the planned survey area, making economic and logistical sense for the company to be based there.
"We're still very much interested in assisting Shell or any operator who wants to explore or produce gas in the Great Southern Basin, but there are always economic and commercial factors that will emerge," Mr O'Connor said.
He said stakeholders were hopeful Shell NZ would commit to exploration expenditure once the surveys were done.
Shell NZ has a Government-imposed deadline of January 10 to take up the exploration permit and begin test drilling or to forgo its claim. The two permits in the Great Southern Basin awarded to the company are mainly in water about 1000 metres deep.
The survey was expected to take about 70 days, would target a 21,200 square kilometre area and be about 150km offshore from Dunedin.
Texas oil company Anadarko, which is to begin test drilling in the Canterbury basin off the Otago Coast about February, said yesterday it would retain its base at Port Taranaki at least during the test drill, rather than move operations to Dunedin.
The Southland Times