Oil explorers think big

Risk high, but could pay off handsomely

MIKE SCOTT

Oil explorers are another step closer to what could be a billion barrel oilfield far off the Taranaki coast.

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Oil explorers are another step closer to what could be a billion barrel oilfield far off the Taranaki coast, up to 20 times the size of the extremely successful Tui oil field.

United States-based Global Resource Holdings and partners Hyundai and Australian firm AWE are looking for other players to help pay to drill a well far off the Taranaki coast, looking for potentially huge oil fields.

The prospects are called Romney, Coopworth and Corriedale, all in deep water up to 1600 metres, but the high risk of a single well costing tens of millions of dollars could mean high reward.

Hyundai became a 30 per cent partner in the prospect last year and AWE holds 10 per cent. AWE is the operator of the Tui field and will soon drill the Hoki prospect, also offshore Taranaki.

They are now looking for other partners around the world to provide the other 60 per cent of the potential cost of drilling, which is likely to be a giant oil exploration company.

Global Resource Holdings said it had started a "farmout" campaign for joint drilling partners to test what it called "world-class prospects which are large enough to materially affect New Zealand's economy".

Global Resource chief Randall Thompson, speaking from Colorado last night, said he was talking to possible new partners, but could not name them because of confidentiality agreements.

"We are looking for the right company. I've been around the world," he said. But he was aiming to find an oil field "as big as anything that's ever been found, is our objective".

Global and partners have until April next year to commit to drill a well. They had not decided which prospect they would drill first, but a test well could cost about US$15 million he said.

Mr Randall said he was an optimist, so he rated his chances as "moderate risk and high reward" with good data. The prospects were in the Taranaki basin which had all the elements in place for a working petroleum system which reduced the risks, he said.

Given the deep water, the partners were expected to try and time the drilling of deepwater Taranaki to coincide with potential deep water drilling in the Great South Basin or off Canterbury within the next couple of years. If successful, field development could take many years and given other offshore fields in New Zealand, the cost would be more than $1b.

But with a potential of 500 million to one billion barrels of oil "the prize is certainly worth it", according to Geological and Nuclear Sciences Institute senior geophysicist Chris Uruski. But he agreed it was "high risk, high reward" territory, with no certainty until a well was drilled.

"But that's kind of exciting isn't it?"

Two independent seismic interpretation reports have just been completed by New Zealand's GNS Science and Australian exploration company AWE across the 32,830 sq km block in deep water off Taranaki. The reports were based on 3400km of new seismic testing last year.

The largest structure mapped so far is the Romney Prospect, which lies in 1600 metres of water. Modelling suggests the structure "may be" charged with nearly one billion barrels of oil, plus 1.7 to 2.7 trillion cubic feet of gas. The Tui field by comparison has reserves of just 50 million barrels, but has been a bonanza for its partners. Coopworth could be charged with up to 512 million barrels of oil and up to one trillion cubic feet of gas. Corriedale is in shallower water of 230 metres, and could hold up to 658 million barrels of oil. Fairfax

- © Fairfax NZ News