Warning as exploration permits issued

The oil industry in Taranaki is likely to expand with the announcement of seven new exploration permits awarded by the government yesterday.

The news has "horrified" environmental activist Sarah Roberts.

"We're on the edge of a huge expansion that is going to occur in an environment that is not regulated properly."

In the first annual Block Offer 10 permits were issued including two in the offshore Pegasus Basin and one in the Great South Basin to the east of Dunedin.

Tag Oil was the big winner in Taranaki, getting all four blocks it tendered for - three of the permits going to Tag Oil subsidiary Cheal and its new partner East West Petroleum.

New Zealand Energy Corporation and New Zealand Oil & Gas received the other onshore Taranaki permit.

Two offshore permits were issued: one each to Todd Exploration and Cue Taranaki, and New Zealand Oil & Gas.

Ms Roberts said people needed to be aware that all the things she had been talking about - flaring, noise, smell - would not be confined just to a small area.

The Parliamentary Commissioner for the Environment was not confident the regulations are working, she said.

"The Government is moving full steam ahead giving out all these permits, knowing we are not on top of our game really.

"What they've seen overseas is exploration gets ahead of the regulations. That's what we are experiencing."

The oil companies awarded permits have committed to spending a total of $82 million on exploration around New Zealand, and up to $766 million should the permits all reach the full five-year term.

International oil company Anadarko picked up two permits in the Pegasus Basin. Anadarko already expects to test drill two or three exploratory prospects in late 2013/14. But it said it would be years before it might test identified prospects in the Pegasus Basin, pending the results of its analysis.

Shell, OMV and Mitsui picked up one new permit in the Great South Basin.

The blocks were awarded on the basis of how much exploration work was planned and the technical and financial capability of the bidders to carry out the work programme.

The blocks offered covered 40,198.53 sq km of offshore seabed and 3305.45 sq km of land in Waikato, Taranaki, Tasman, the West Coast and Southland.

An exploration permit gives the permit holder the exclusive right to explore minerals over the area specified in the permit. It does not give them automatic access to the land.

Taranaki Daily News