Confidence oil will be found off coast


The company about to undertake a seismic survey off the North Otago coastline is confident extensive hydro gas resources will be found.

New Zealand Oil and Gas spokesman John Pagani said they knew there was an active hydro carbon system in the area.

“There are oil seeps on the Oamaru coastline; oil and gas is out there. We understand it’s all over the place.”

The company is confident is because the area has only been lightly surveyed in the past and the Great South Basin was an “analogue” of the Taranaki basin, the home of all the country’s oil and gas production.

“Sixty million years ago, there was a mountain range that came through on the main fault line that goes through Wellington,” Mr Pagani said.

“Run-off from that range went on two sides – one into the Taranaki oil and gas basin, and the other one in Canterbury. Scientifically it looks very similar.

“We expect to find similar resources (as Taranaki).”

The Great South Basin was surveyed in the 1980s by British Petroleum, which discovered oil about 30km off Oamaru, between Oamaru and Timaru, but Mr Pagani said it had been found to be “sub-commercial”.

“At the time, oil prices were very low.”

This well was drilled in 1986 and called Clipper. NZ Oil and Gas has a 50 per cent interest in Clipper and 100 per cent control of a new permit granted to them, immediately south of Clipper in the Great South Basin, named Galleon.

“The reason for our interest is because of the work that was done in the 1980s which showed there was oil and gas and also because more sophisticated surveying technology is now available,” Mr Pagani said.

He added that it was far too early to make judgments but after surveying was completed and, if drilling did proceed, Oamaru would benefit.

“It would be logical that everything is in Oamaru,” Mr Pagani said.

However, it could still be a long process. Mr Pagani said the Kupe oil and gas field in Taranaki was founded in 1986 and not developed until 2007. He said the economic benefits for the country from the industry were immense. Tui, a small field which has been operational since 2007, and had an expected life through to 2020, would contribute $2 billion to the New Zealand government in royalties.

Mr Pagani said that for every nine oil wells drilled in New Zealand, only one turned into commercial production.

“We need to do a lot of study.”

Waitaki Mayor Gary Kircher said if drilling went ahead, it would bring job opportunities “for our people”.

“I see it as no different to what has gone on in the past. My generation remembers the oil rig in the 1970s. I think it’s hypocritical when we all drive around in cars and say we won’t have it in our backyards.

“As far as scare mongering around drilling, there’s a lot of difference with our situation now and what has happened in one or two isolated situations around the world.”

Mr Kircher said he would be happy to talk to people if they had concerns.

“It’s known there are reserves out there. It depends whether it’s economic to get at them. Time will tell.”

The vessel conducting the survey off the North Otago coast will be the Polarcus Alima, a sophisticated vessel which travels the world. The various companies involved in the New Zealand oil and gas industry have chartered the ship, sharing costs as the 10 permit sites around the country are explored this summer.

The Polarcus Alima will be operating 30 to 40km off the coastline, sailing backwards and forwards over the permit area. Mr Pagani expected the survey would take three weeks, after which the data would be analysed.

“There will be no drilling at all; it will take another six months of analysis and interpretation and we’ll try and get an understanding of where the hydrocarbons might have formed.

“If there’s a prospect of drilling, there will be no one drilling for the next year.”

NZ Oil and Gas has been granted two other new permits besides the Great South Basin. One is off Taranaki; the other permit (55794), named Toroa, is in partnership with Woodside which will be operator. The permit area is southeast of Dunedin.



ON A MISSION: The Polarcus Alima, which will be surveying off the North Otago coastline over the Christmas period.

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