Enthusiastic welcome for drill plan

19:57, Jan 07 2014

@devlincolle: Southland leaders have welcomed Shell New Zealand's decision to drill for gas in the Great South Basin but say it is too early to celebrate.

The timing of the drilling programme will be decided after detailed planning but was expected to start in summer 2016.

Shell New Zealand chairman Rob Jager said it had not yet been decided if operations would be based from Bluff or Dunedin.

Invercargill Mayor Tim Shadbolt was optimistic and said the news was absolutely fantastic and a great way to start the new year.

"I know it's a long way off before we know if anything major will happen but this news is a real boost for the south and for business confidence," he said.

He hoped the safe drilling operations off Taranaki would alleviate any fears of something going wrong.

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South Port chief executive Mark O'Connor, who is also chairman of the Southland Energy Consortium, said the decision had the potential to be the most significant development for Southland in several decades.

If significant gas was found it could be a catalyst for further exploration by other international parties.

South Port had been in contact with Shell for several months to discuss Bluff as a base.

Some of the advantages put forward were significant berth availability, refuelling supplies, the huge scale lay-down area for pipes and materials, and past experience.

Southland Chamber of Commerce president Sean Woodward said business leaders and councils in the region needed to lead the way and encourage Shell to work in Southland.

Dunedin looked to be the frontrunner when it came to setting up a base, he said.

"It may not happen here for 10 years, but now is the time to make the effort and invest in potential opportunities, making sure there is infrastructure and people in place."

Venture Southland enterprise and strategic projects group manager Steve Canny said it was a good and predictable outcome, but it was still too early to prove the validity of any resources.

"It is such an early stage of activity, it will be difficult to pinpoint any direct benefit to Southland yet," he said.

The initial phase would likely see Otago providing response vessels but Southland had made a good case for being involved later down the track .

"Wait and see how it all rolls out."

Green Party Invercargill spokesman Dave Kennedy said the decision was a concern because it was a huge risk and would have little benefit for Southland.

There was no indication there would be any protection if something went wrong, he said.

"The deeper they drill the bigger the risks."

He believed Dunedin would be used as Shell's base because it was closer than Bluff, so Southland would see little economic impact.

Petroleum, Exploration and Production Association NZ chief executive David Robinson said unlocking the petroleum potential in the Great South Basin could provide real benefits to communities and the country as a whole.

"We just need to look towards the impact the oil and gas industry has had on Taranaki to know that the economic benefits of growing the industry are significant."

Even though it takes about 10 years to fully develop a producing well, a decision to drill is the first step in ensuring benefits will flow locally and nationally, he said.

The Southland Times