By Neil Ritchie

THE POSITIVES far outweighed the negatives at the Advantage New Zealand Petroleum Summit 2015, with delegates looking at ways to weather the storm of world oil price slumps and further investigate this country’s possibly huge petroleum potential.

A few speakers, including Shell New Zealand chairman Rob Jager and New Zealand Petroleum and Minerals general manager James Stevenson-Wallace, conceded that some government legislation was “clunky in parts” and needed streamlining, particularly with regard to the environment and deepwater exploration.

However, many more spoke of the country sitting in a good position regarding its fiscal and regulatory regimes, above-ground-risks, and the improving understanding of the geological and geophysical risks associated with drilling in frontier regions.

Wood McKenzie upstream analyst Matthew Howell said the country’s fiscal regime was the fourth best in the Asia-Pacific region; that its above-ground risk rated highly, just below that of the Netherlands and Norway; and that the terms of the government’s licensing regime were “generous”.

New Zealand had so far found commercial oil and gas only in the Taranaki basin, he said – adding that Denmark and Brunei were in a similar position, and yet had been successful in developing a successful industry.

But New Zealand had another 17 or so frontier basins and hopes were high that at least one would prove commercial if companies continued actively exploring, Mr Howell said.

“There are a lot of positives,” he said.

Anadarko Petroleum geoscientist Freyd Rad told delegates of failing to find any worthwhile hydrocarbon accumulations with the Romney-1 wildcat – the first well to be drilled in the Deepwater Taranaki basin – as both the primary and secondary objectives were water bearing.

Though relinquishing operatorship of the licence PEP 38451 late last year, Anadarko still believed that a working petroleum system capable of generating both oil and gas could still exist in the basin, probably in shallower water closer to shore, he said.

Anadarko’s senior geological advisor Steve Blanke said his company and partner Origin Energy were encouraged enough to keep pursuing other exploration opportunities in the offshore Canterbury basin – despite the first deepwater well, Caravel-1, being a dry hole when drilled early last year.

The companies recently had a 3D seismic survey conducted over the Wherry and Gondola prospects and were analysing the data obtained.

New Zealand Oil & Gas geoscience advisor Mac Beggs said that the recent lack of drilling successes off Taranaki – no new discoveries for almost 13 years – might indicate limited remaining petroleum potential.

But scientific evidence and reasoning supported the idea of opportunities “with copious remaining potential”.

Shell New Zealand chairman Rob Jager spoke about the recently released Venture Taranaki report – entitled “The Wealth Beneath Our Feet – The Next Steps” – that New Zealand’s energy self-sufficiency is currently about 83 per cent, with oil contributing about 33% of total primary energy supply, and natural gas a further 22%.

The report also said that oil and gas are key to realising the government’s goal of raising the ratio of New Zealand’s exports to GDP by 40% by 2025.

He also spoke on another recent report, by GNS Science, which says two Crown Research Institutes and two universities are part-way through a research program to better understand New Zealand’s offshore gas hydrates deposits that are seen as a potential future energy source.

He said these hydrates could prove to be a massive new energy source perhaps containing ten times as much gas as the offshore Taranaki Maui field used to decades ago – 35-40 trillion cubic feet of reserves. It was just a matter of when and where.

Mr Jager also said that with the number of world-class operators currently exploring New Zealand he was confident the country would find “another game changer” to complement the earlier offshore Maui and near-shore Pohokura gas discoveries.

His confidence was based on the government’s commitment to a business growth agenda and the development of a world-class regulatory environment. Another factor was a world-class industry committed to safety and innovation and a desire to invest.

“It’s just a matter of when and where… and, finally, a healthy dose of good luck.”

The discovery and development of a big new oil or gas field could have a large impact on New Zealand’s export earning capacity, he added.

The development of a new coastal field could mean more than NZ$3 billion of investment, creating 270 new jobs in the project’s construction. An offshore field could lead to NZ$6.5 billion of new investment.

A major deepwater gas field could mean NZ$19.3 billion of development spending.

“These are just scenarios,” he added, but said they gave a sense of the scale of opportunity.

Finding another Maui-sized field could see New Zealand become part of the international gas market through its own floating liquefied natural gas (FLNG) export project.

“This would without a doubt be a significant game changer for our country.”

It would also contribute to the global transition towards a low-carbon economy as the world continued looking for alternative energy sources.

“The international petroleum industry clearly views New Zealand as one of the world’s more promising and under-explored regions,” he said.