High-stakes play for oil giant

SV Vega confronts the Noble Bob Douglas drilling ship on the site where oil giant Anadarko has begun exploratory drilling for deep sea oil.
SV Vega confronts the Noble Bob Douglas drilling ship on the site where oil giant Anadarko has begun exploratory drilling for deep sea oil.

For years now Alan Seay has been preparing for this crescendo.

The New Zealand face of Texan oil and gas giant Anadarko is suddenly everywhere - on TV, radio and on the pages of every daily newspaper in the country.

This rush of appearances began when his employer faced down Greenpeace protesters and began drilling in 1500 metres of water 200km offshore west of Raglan.

As the drillship Noble Bob Douglas began establishing an exploratory well on Tuesday, Greenpeace filed papers in the High Court in Wellington to stop the drilling.

Quite aside from its legal tack, its position is a spill would be an economic and environmental disaster the country can ill afford and that we should be weaning ourselves off fossil fuels anyway.

Mr Seay says the legal moves are not overly worrying and that Anadarko always expected such protests.

"We know there are entrenched perceptions among a certain segment of society, which is fine. We always knew there would be opinions across the spectrum.

"There was always the view from some that no drilling should ever take place and they would move to try and stop it, which is exactly what happened," he says over a coffee in a New Plymouth cafe.

"I think that outside of Taranaki, oil and gas exploration is very new, something people haven't thought about. I don't think the impact of the industry we have right now is known.

It is the fourth biggest export we have and that is based on a small number of discoveries in a small number of fields.

"What if we could open up one or two new basins? That is what we hope to do," he says.

The two basins are the Deepwater Taranaki Basin and the Canterbury Basin.

Both are thought to contain billions of barrels of oil or gas. It is the Government's hope Anadarko will be able to find some of it and turn it into billions of dollars for both parties.

Anadarko has proved it can do it. In 2005 it began an exploration programme off the coast of Mozambique and made the largest gas discovery in a decade.

It has since invested $15 billion in an offshore liquid natural gas processing facility and, for better or worse, the money it will bring looks set to transform the grindingly poor country.

There is no question a find would financially enrich both Anadarko and New Zealand.

But there are also fears it will destroy the environment if something goes wrong. Anadarko is more acutely aware than most of the sickening consequences of a spill.

It held a 25 per cent "passive" stake in BP's doomed Macondo well that spewed oil into the Gulf of Mexico for 87 days after a well blowout that killed 11 men and destroyed the drilling rig Deepwater Horizon.

That well and the one being drilled by the Noble Bob Douglas are both in 1500m of water.

But that's where the similarities appear to end.

Rob Funnell, head of the petroleum geoscience department of the Government's GNS Science, says the expected conditions in the Taranaki basin "are extremely unlikely to lead to a similar scenario to that as occurred in the Macondo well".

It's all to do with pressure and heat. Geologically, the Gulf of Mexico is far older than the Taranaki Deepwater Basin and it is time which generally creates heat and pressure of the sort that causes oil or gas to "gush" from the ground once pricked.

"Most people have the idea of oil drilling being like Jed Clampett shooting at the ground and oil coming up," says David Robinson, chief executive officer of the Petroleum Exploration and Production Association of New Zealand.

"But it's not like that at all."

Oil and gas, at least that discovered in Taranaki so far, is usually reluctant to come out of the rock it lives in, even when it has been found, he says.

Most wells have to be "coaxed" to produce. This can be done with pumps, through fracking or forcing hot water down the well.

"So far New Zealand hasn't managed to find that well that will pump oil by itself," Mr Robinson says. "We just don't have the preconditions for the Gulf of Mexico."

Even if it did, the Macondo blow-out was the result of a spectacular combination of independent failures in well design, equipment and human monitoring. Mr Robinson says the lessons gleaned from it mean the odds of it happening again are "extraordinarily low".

But he, Anadarko and GNS agree prospectors can never know what conditions they may encounter until drilling is under way.

"It's never completely impossible," Mr Robinson says. "But nothing in life is without risk."

Taranaki Daily News