By Neil Ritchie

THE 2014 New Zealand Petroleum Summit held in Auckland during early October was one of the largest and most successful conferences yet, with record numbers of delegates from a record number of countries attending.

Over 400 delegates – from Australia, Asia, the UK, North America, South America, Europe and of course New Zealand – attended the three-day event, which Petroleum Exploration and Production Association of New Zealand (Pepanz) chief executive Cameron Madgwick described as “outstanding for delegates, exhibitors and sponsors” despite several protests inside or outside the conference venue.

First, several hundred Maori and non-Maori participated in the Waiho Papa Moana, or Stop Deep Sea Oil Drilling, protest hikoi (march), including iwi representatives from Northland’s west coast, who stopped outside the Sky City
Convention Centre.

Then seven Greenpeace protestors disrupted Energy and Resources Minister Simon Bridges’ address, gaining access to the conference using fake identities and name badges.

They carried satchels from which they scattered shrill sounding personal alarms and unfurled protest banners before being escorted outside where they continued protesting.

One satchel obtained by the media also contained a pair of handcuffs and written messages for people wanting to contact Greenpeace anonymously regarding oil and gas and global climate change.

That night more Greenpeace protestors daubed themselves in fake oil and stood protesting outside the Auckland Museum where the conference gala dinner was held.

Mr Bridges later said he was not overly worried by the protests – “they have nice but misleading slogans . . . and this government does admit our need to transition to a cleaner energy future”.

There was also an “oil funeral” held outside the venue by Oil Free Auckland protesters as the conference finished.

New entrant Norwegian oil giant Statoil, a major sponsor of the event, was specifically targeted by protestors but exploration vice-president Nils Telnaes told delegates Statoil was used to such happenings and was already engaging with relevant government and non-government organisations, including Northland authorities and affected Maori.

“We (the world) will move to a low carbon economy but we need to fuel that transition,” he added.

He said Statoil believed New Zealand was an attractive place to explore for oil and gas, with the government having good fiscal and regulatory regimes and offering large swathes of frontier acreage in its blocks offers.

Statoil has already conducted sea floor surveys over parts of its sole offshore Reinga basin exploration lease PEP 55781 and plans a new 2D seismic survey over the 2014-2015 summer.

“We will prioritise our investment fund where we find it more attractive and I think the New Zealand authorities have done a good job of this.”

But it would be several more years before Statoil decided whether to drill a wildcat well in the large deepwater frontier basin, though the company believed it could make a 100 million barrel oil discovery economic to develop.

“New Zealand has the potential to become an important part of Statoil’s operations,” he added.

Woodward Partners head of research director John Kidd looked at exploration, production and development for the past 12 months and gave his “scorecard for 2014 and ahead”

None of the last five offshore exploration wells had resulted in any discoveries, though there were still hopes the last scheduled exploration wells – Ruru-2 and Maui-8 within the Maui field – would discover some significant new reserves.

The on-going Maari and Maui appraisal programs were also proceeding well, he said, with “the tea leaves point(ing) to some seemingly strong success.”

Though on a smaller scale, onshore exploration, appraisal and development activity was also strong, from the impressive NZ$800 million ongoing Todd Energy Mangahewa Expansion Project involving the “Big Ben” cyber rig and advanced horizontal fracking of up to 27 development wells, to more successes by such companies as TAG Oil and Greymouth Petroleum

As far as production was concerned, Woodward Partners expected “a sharp uplift in production” during 2015, mainly from offshore activities such as the tie-in of the Pateke-4H well into the Tui Area processing facilities and additional production wells and water injection wells being drilled into the more southern Maari -Manaia fields. Total additional reserves (and future production) could exceed 22 million barrels.

Gas production was “delicately poised” with decreased gas usage in most gas-fired power stations but increased “indirect usage” through Methanex New Zealand running its methanol plants at almost maximum capacity of 90PJ per year.

There were also reserves upgrades of most fields’ gas reserves, by 31 per cent from 2012 to 2013, with known remaining reserves now standing at 2,642 petajoules, the highest in 13 years.

However, this was not yet enough for Methanex to consider the construction of an additional methanol production train, said global gas director Phil Watson.

Methanex probably needed about one trillion cubic feet of new gas – off Taranaki or elsewhere off the North Island or South Island – before it could contemplate constructing a third production train at its Motunui complex just north of New Plymouth.

The current Motunui and Waitara Valley facilities should be able to run at full capacity for at least the next eight, perhaps 20 years, based on increasing gas reserves but Methanex needed one, if not several, significant new long-term gas supply contracts signed before it would be confident enough to commit to another production train.

Kidd also said investors were grappling with “mixed signals and situations” but the overall appeal of New Zealand as an investment destination remained strong.

“Despite divergent themes, international investors are still interested, still kicking tyres,” he concluded.

And, as widely anticipated by many in the sector, the government’s New Zealand Petroleum & Minerals unit, Pepanz and Freeman Media are merging the previously separate Advantage NZ and Petroleum Summit events.

So the small New Zealand oil and gas upstream industry will be able to focus on just one encompassing event per year, with the Advantage 2015 New Zealand Petroleum Summit being held in Auckland next March.