Oil companies resist new reserves disclosure regime

Tuesday 21st September 2010

Oil and gas field owners have “no appetite” for disclosing any more information than they do already about the likely size of their petroleum reserves, the Petroleum Conference in Auckland was told today.

However, in a report back from the government’s consultation on petroleum reserves reporting, the Ministry of Economic Development’s energy and communications chief adviser, David Buckrell, said downstream gas users were enthusiastic about less certain reserves being reported publicly.

The reportback also showed the month-long consultation produced only three submissions from upstream oil companies – Shell New Zealand, Origin Energy, and New Zealand Oil & Gas – and a limited response from major gas users.

Todd Energy, whose tendency to claim large undeclared gas deposits in the past was cited in the discussion documents as a reason for needing more complete disclosure, made no submission, and other upstream players such as Greymouth Petroleum and OMV did not participate.

Neither Contact Energy nor Genesis Energy – between them the two largest natural gas users – made submissions.

The submissions found general support for increased penalties for non-compliance with disclosure requirements, but no support for moving to the highly specific reporting regime required by Norway. Instead, a system more like the United Kingdom’s was favoured, involving information about a wider range of potential resources.

Earlier in the day, an international expert on petroleum tax regimes, Professor Alex Kemp from Aberdeen University’s Centre for Research in Energy Economics, said special treatment for remote, “frontier” exploration areas could be justified.

“More liberal conditions are appropriate than for areas where not much experience and data exists,” he said. It was common internationally for licence fees to be lower in frontier territories and for different relinquishment terms to apply.

The biennial Petroleum Conference has concentrated particularly on four frontier basins in New Zealand – Reinga off the coast of Northland, the Great South Basin, Pegasus off the east coast of the North Island, and offshore Canterbury, where Origin Energy is partnering with global deep-sea drilling expert Anadarko to drill two exploration wells.

Geologist Ray Wood from the Institute of Geological and Nuclear Sciences (GNS) presented analysis of new seismic data from the Reinga prospect showing numerous areas of potential, including one potential “Maui-like structure”.

Anadarko’s head of international new ventures, Bret Dixon, showed detailed 2-D and 3-D seismic analysis of the Carrick and Caravel prospects in the Canterbury basin, both of which showed promise and used techniques not previously employed to analyse a New Zealand frontier basin.

A presentation from GNS’s Chris Uruski on the Pegasus basin, east of Wellington, unveiled brand new seismic results which have yet to be fully analysed but showed numerous encouraging signs for petroleum systems.

The conference also heard further calls for the government to amend how the emissions trading scheme applies to oil and gas producers.

“A lack of consultation resulted in the legislation filing to provide a contractual ‘pass through’ from producers for legacy gas contracts,” said the chair of the Petroleum Exploration and Production Association of New Zealand, John Bay.

While the government’s Petroleum Action Plan was welcome, Bay said there was a proliferating range of policy reviews in other areas which affected the industry.

These included the implications of the replacement legislation for the Foreshore and Seabed Act, the impact of new marine reserves on exploration activity, Resource Management Act and Exclusive Economic Zone regime reforms, and bio-security regulations relating to when and how ships and oil rigs should be cleaned.

Businesswire.co.nz

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