OMV seeks permit for Great South Basin work

Friday 29th March 2019

OMV has sought a consent to bring a drilling rig into its Great South Basin permit south-east of Dunedin.

The firm, which operates the offshore Maui and Pohokura gas fields, has been a partner in the acreage since it was issued by the government 12 years ago.

It has applied to the Environmental Protection Authority for a permit to discharge rainwater run-off from the decks of any rig it may use if it proceeds with drilling there. Its 16,715 square-kilometre permit, extended by the government last year, expires in July 2022 and requires the drilling of a well by mid-2021.

The notified discharge consent is a technical anomaly in the laws governing activity in the Exclusive Economic Zone. But the approval will be required if OMV and Mitsui are able to bring in another partner and proceed with drilling.

“Plans and timing cannot be confirmed until Otago and Southland community stakeholders have been consulted, and the EPA approvals process has been completed,” OMV said in response to questions from BusinessDesk.

The potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised. There are proven petroleum systems in the region but drilling has been sporadic since the 1970s and activity dried up after the plunge in oil prices late 2014.

Several wells drilled in the region, including Caravel-1 drilled by Anadarko Petroleum north-east of Dunedin in 2014, have shown gas, but not in quantities considered economic.

The Kawau-1A well, drilled by Hunt International Petroleum in 1977, gave some of the most promising results. The structure, about 250 kilometres off the Catlins Coast, was estimated to hold 461 billion cubic feet of gas and condensate but wasn’t considered economic back then.

The Clipper and Galleon wells, drilled by the Shell, BP, Todd venture in 1984 and 1985, lie north and south-west respectively of the Barque structure that New Zealand Oil & Gas wants to drill off the coast of Oamaru. Both were sub-commercial gas condensate discoveries.

OMV, NZOG and ASX-listed Beach Energy - which now operates Anadarko’s former Carrack-Caravel permit - have a unique opportunity to drill their acreage.

Tamarind Resources is bringing the COSL Prospector rig to New Zealand for its Tui drilling programme later this year. The four-year-old vessel, designed to operate in the harsh environment of the North Sea, will be the most advanced semi-submersible rig ever to operate here.

OMV is planning to use the rig next summer for its drilling programme off Taranaki.

“Subject to confirmation of GSB plans and timing, we will have an option to use it there also,” OMV says.

Shell’s departure from New Zealand left OMV with almost 83 percent of the Great South Basin permit. Last month, Asia-Pacific senior vice-president Gabriel Selischi said the firm was seeking another partner but wanted to retain a 40 percent interest.

Any discovery would need to be “very significant” to get produced, with a liquefied natural gas development a likely option in the case of a discovery, he said at the time.

(BusinessDesk)

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