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Exxon, OMV to explore New Zealand fields

Art

Exploration projects led by ExxonMobil Corp. of the US and Austria's OMV AG will spend 1.2 billion New Zealand dollars (S934 million) looking for new energy fields in the Great South Basin offshore New Zealand, a government official said Wednesday.

“The intensity of work proposed for the Great South Basin is unprecedented in New Zealand's history and will effectively double the amount of investment in oil and gas exploration here over the next few years,” Associate Energy Minister Harry Duynhoven said. Permits to explore four undersea areas off South Island have been awarded to two groups, one led by ExxonMobil New Zealand (Exploration) Ltd. and the other by OMV New Zealand Limited (Austria). “It is one of the world's hot spots for exploration,” Duynhoven said. “The data indicates the potential for commercially viable finds.”

The New Zealand Petroleum Exploration and Production Association said the Great South Basin is a “frontier wildcat drilling area,” with potential for high reward matched by high risk. While the basin's depths of up to 1,250 meters (4,100 feet) are well within the capability of current drilling technology, weather and sea conditions and distance from shore would prove challenging for explorers, said John Pfahlert, executive officer of the association. “The key factor is that the large size of the geological structures identified to date suggests the potential for world class discoveries,” he said. Those were loosely defined as deposits containing more than one hundred million barrels of oil or one trillion cubic feet of gas.

Previous 'light' exploration between 1976 and 1984 saw eight wells drilled in an area covering 100,000 square kilometers (40,000 square miles). Three had oil or gas shows, Pfahlert said. Preliminary field work and exploratory drilling is likely to take up to five years, with development of any finds to start afterward. Any oil and gas from the fields would not reach market for at least 10 years.

ExxonMobil spokesman Cameron Bower told New Zealand's National Radio Network the company hopes to have an exploration rig off the southern coast within three years and trusts the rewards will be worth the effort and expense. “We have to do the hard work now over the next two to three years to really identify the potential (for finding oil or gas) but ... we wouldn't be here if we weren't optimistic,” he said. The prospecting work off South Island will double the amount other companies have indicated they will spend in exploration work off the east and west coasts of North Island in the same period, officials said. (iht.com)

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