Oil and gas exploration evaporates in 2016 block offer

Thursday 15th December 2016

Todd Corp has emerged with the only new oil and gas exploration permit after the government's Block Offer 2016, which had invited bids covering 525,515 square kilometres, including four offshore and one onshore area.

Bids closed on Sept. 7 after a six-month tender with the lowest uptake since the government began the annual tender in 2012. Locally-owned Todd Exploration Management Services was granted a 10-year onshore exploration permit in the Taranaki Basin, said NZ Petroleum & Minerals, which manages New Zealand's government-owned oil, gas, mineral and coal resources. The permit, PEP 60273, has an area of 219 km2.

The state agency said it received "a number of bids" in the latest tender before granting only one. It didn't give details but said bids received was lower than in previous years. "While this is disappointing, it is important that as a regulator NZP&M continue to apply the legislation consistently and that bids meet the requirements of the Crown Minerals Act 1991, despite the downturn," it said. Energy and Resources Minister Simon Bridges blamed the state of the sector globally.

“The global downturn in the petroleum industry that began in late 2014 has had a profound effect on exploration expenditure worldwide”, Bridges said. "Global bid rounds such as New Zealand’s Block Offer continue, though they are currently attracting lower interest and work plan commitments".

PEP 60273 adds to Todd's permits in the Taranaki Basin, which include interests in the Pohokura, Maui, Maari, Mangahewa and Kapuni fields. Todd is New Zealand's largest privately owned energy company.

The outcome of the first Block Offer programme was launched with fanfare at a parliamentary reception and the programme was a key part of the government's efforts to attract international interest in New Zealand's lightly explored offshore basins.

Several of the successful bidders in those rounds have since either allowed exploration licences to lapse or are seeking extensions of time before committing to drill wells.

BusinessDesk.co.nz

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