Tuesday 30th April 2019
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Almost 2,200 square-kilometres of Taranaki is being offered for oil and gas exploration in the much-delayed 2018 block offer.
The acreage – restricted to onshore Taranaki by the government’s decision last year to ban drilling outside Taranaki and any new offshore exploration – is just over twice what was offered in the region in the 2017 offer.
But the latest offer – running about a year late - restricts access to conservation land, except for minimal impact activities, and also imposes an additional “engagement” requirement on bidders.
“The new condition explicitly requires permit holders to engage with iwi on an ongoing basis, with specific early engagement requirements in relation to activities to be undertaken within 200 metres of areas of significance to iwi,” says Ilana Miller, national manager for petroleum and minerals at the Ministry of Business, Innovation and Employment.
Oil and gas accounts for about half the country’s primary energy needs, with three of the four biggest gas-producing fields – Maui, Pohokura and Kupe – offshore. Gas produced about 12 percent of New Zealand’s electricity last year.
Onshore fields produced about 37 percent of the country’s natural gas last year, with Todd Energy’s Mangahewa field and Greymouth Petroleum’s Turangi field being the biggest contributors. Canada’s TAG Oil, citing the exploration ban, last year sold its business, including the onshore Cheal and Sidewinder fields, to Tamarind Resources.
Exploration interest in New Zealand has slowed sharply since the collapse in oil prices late 2014. Even before then interest in onshore acreage was limited.
Fifteen permits were awarded in 2014, including three onshore Taranaki blocks. But only one permit was awarded in each of the offers since 2016, with no onshore acreage awarded in the 2017 offer.
Firms interested in bidding in the 2018 round need to show they have the financial, technical and health, safety and environmental capability to undertake the work. They must lodge their proposals with the government by Aug. 28.
Awards are traditionally announced in December but can be made any time prior to April 1.
The government announced its offshore exploration ban in April last year, saying at the time the existing acreage was sufficient to ensure security of energy supplies.
OMV, operator of the Maui, Maari and Pohokura fields, earlier this year announced a $500 million programme of work to maintain production from Maui and Pohokura. It is also planning further exploration drilling off Taranaki this summer and has sought a consent to drill off the Otago coast in coming years.
In February, Asia-Pacific senior vice president Gabriel Selischi said the firm’s exploration efforts in New Zealand are likely to end if there are no significant discoveries from those programmes.
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