Test-drilling planned

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Test-drilling of an on-shore oil and gas prospect on land north of Oamaru could get under way within the next 12 to 18 months.

Canadian-based corporation Tag Oil will drill the test well, Jardine-1, on land in Jardine Rd, northwest of Oamaru.

The latest test drill is not a first for the Canadian-based company, which operates three production plants onshore in Taranaki and has a wide network of pipelines.

Tag Oil drilled two wells back in the 1950s, Oamaru-1 and Oamaru-2.

Both had hydrocarbon shows but not in commercial quantities.

Tag Oil New Zealand country manager Max Murray said modern technology had helped the company define the current drill location.

“We have conducted magnetic and gravitational surveyed in the area and based on these studies, have chosen to drill Jardine-1,” he said.

“Timing for drilling the well is dependent on accessing a suitable rig which is located in the South Island.

“With significant changes to petroleum exploration and extraction regulations, the number of rigs that comply has reduced considerably and we are aware of only one rig which meets our own internal standards and the new regulations.”

According to Mr Murray, the well, which be relatively shallow (850m), will not require a large rig.

“The key to progressing the land access agreements and resources consents hinges on securing the drilling rig,” he said.

“The rig defines the size of the lease required and applicable consents.”

Mr Murray said the company would lease the land and once the rig had been secured, it would take between six and nine months to obtain land access agreements and associated resource consents.

“It will then take about a month to build the drilling pad/location infrastructure and about two weeks to drill the well,” he said.

“Typically, about 25 to 30 people are required during the drilling operation.”

Waitaki mayor Gary Kircher said he was “cautiously optimistic the venture would prove successful”.

“I understand the company is focused more on gas than oil,” he said.

“I look forward to meeting Tag Oil personnel in the very near future and being part of what we hope will be a successful venture.”

The area of the permit, which covers the Jardine-1 test well, was initially granted in 2010.

The permit has recently been extended until November 2020 and is primarily concentrated on land south of Waimate and south to Warrington.

By Jacquie Webby