By New Zealand Correspondent Neil Ritchie
NEW ZEALAND Energy and Resources Minister Simon Bridges has opened up the biggest area of New Zealand for exploration yet in Crown’s 2014 Petroleum Blocks Offer – a total of 40.5 million hectares of offshore and onshore acreage.
This is almost double the size of last year’s blocks offer but Mr Bridges said he expected only a fraction of the current available acreage would actually be granted as new petroleum exploration permits (PEPs) as only about 13.5 per cent of the 2013 acreage was awarded as new PEPs.
The five offshore release areas are the Reinga-Northland basin, the New Caledonia basin, the Taranaki basin, the Pegasus-East Coast basin, and the Canterbury-Great South basin.
The three onshore release areas are acreage in Taranaki, the East Coast of the North Island and the West Coast of the South Island. The makeup of the final block offer follows extensive government consultation with appropriate Maori and local authorities.
The mix of large high risk offshore frontier regions and smaller lower risk coastal and onshore areas, particularly in Taranaki, the country’s only commercial petroleum province, was widely anticipated by the energy sector.
“This is exactly what we were expecting – basically all available frontier acreage offered up to the big boys, the large multinationals, and what’s left over in onshore and offshore Taranaki from previous bid rounds, plus some acreage on the East Coast and the West Coast of the South Island,” one commentator told Oil & Gas Australia.
Mr Bridges added that the latest block offer was supported by comprehensive data packs, including some previously unavailable data, to provide explorers with “timely and accessible information to support decisions about investment in New Zealand.”
Bids for acreage in the 2014 block offer close on 25 September and Mr Bridges said he expected to award the new permits in December. He also called for industry to nominate the areas it would like to see opened up in the 2015 petroleum blocks offer.
The last two annual block offers had both seen new players come in, notably Woodside Petroleum and Norway’s Statoil, “and we want to keep that momentum going and to see the industry continue to grow,” Mr Bridges said.
The minister also said there was strong continuing interest in New Zealand from companies in the United States, Canada, Norway and other European nations, as well as Australia.
Majors believed to be interested in New Zealand include Chevron, Santos and Spain’s Repsol, which has an Asia-Pacific branch based in Perth.
Mr Bridges also said he was “highly confident” US major Anadarko Petroleum would explore New Zealand again “because they see our geological potential”, notwithstanding the recent non-commercial wildcat wells drilled – Romney-1 in the Deepwater Taranaki basin and Caravel-1 in the offshore Canterbury basin.
Even this blocks offer would “barely scratch the surface of the country’s petroleum potential”.
And it would be “an economic game-changer for our nation” if just one more of the country’s 18 geological basins became a petroleum producing province, alongside Taranaki,
Meanwhile, Labour Party leader David Cunliffe described the latest blocks offer as “a fire sale”. While his party did not oppose all offshore exploration, it was not satisfied with current environmental protection measures.
And the Green Party was appalled that only a little over 12 per cent of the total acreage on offer was for shallow coastal or onshore exploration. About 55 per cent was for ultra deepwater exploration and 32 per cent for deepwater work.
Green Party energy spokesperson Gareth Hughes said about one in nine ultra deepwater wells in the Gulf of Mexico had some kind of spill and one in 35 deepwater wells.
He branded the fact that oil production in New Zealand has fallen by 40 per cent and oil export revenue by 47 per cent in recent years – primarily because of declining replacement reserves — as a “failure” and exhorted the government to stop encouraging petroleum exploration.