Government figures and consultants alike often referred to the Taranaki Basin as being under-explored by comparison to the United States. However, the reserves additions per wildcat well for offshore Taranaki showed form more akin to that of a mature basin, O'Connor told the Conference gas gathering.

"Why is this? The answer is a combination of inefficient stop-start exploration and low level of drilling activity relative to that required statistically to achieve significant reserves additions. It is clear that the rate of drilling in New Zealand is not enough to even meet these modest reserves additions, let alone replace Maui Field."

The current rate of exploratory drilling was insufficient to statistically predict at least one discovery, and that situation was not expected to change much, said O'Connor, echoing the concerns expressed by former Fletcher Challenge Energy chief operating officer, Lloyd Taylor, at the 2000 NZ Petroleum Conference.

Taylor, now Shell New Zealand chairman, told the Christchurch conference that to achieve a 90% confidence of having enough new discoveries to replace Maui, which was expected to falter from 2006, the level of wildcat drilling needed to treble from the average of four wells a year.

O'Connnor said it was expected that only one true wildcat would be drilled offshore in the next three years and that would be on the unproven Western Stable Platform.

He added that the Deepwater Taranaki acreage was tantalising, but discoveries would need to be large, at least 3tcf, to be economic and that operating costs would be high.

Although some fairly large estimates of deepwater reserves - in excess of 15 billion barrels of oil equivalent - had been proposed by some commentators, no real data existed to support these claims, merely comparisons with some other possibly analogous deepwater basins.

Even in the event of commercial deepwater Taranaki success, O'Connor warned this area was not expected to provide any deliverable gas until 2012 at the very earliest, which might be up to six years too late if there were development delays or significant downgrades in Pohokura or Kupe, which were the only two fields with sufficient reserves to have a significant impact on gas supply.

The three main potential sources of future gas supply were incremental reserves in existing fields, potential reserves in undeveloped fields and fields under appraisal, and potential resources from exploration prospects. None looked very positive for New Zealand, which currently uses about 200 bcf of gas a year.

Remaining reserves from existing fields accounted for only about 1320 bcf of gas (and 54.5 million barrels of crude or condensate), while fields under appraisal might only have reserves of about 828 bcf of gas (and 66 million barrels of oil). Potential resources included higher cost reserves within the fields (such as unperforated tight gas layers and deeper tight gas), and some structurally complex areas such as Rimu that had yet to demonstrate long-term reservoir performance.

Even an 18-well exploration program, if carried out repeatedly, would statistically yield on average approximately two years of production. "The message is simply that persistence will be required, rather than unco-ordinated sporadic efforts," the New Plymouth-based executive said.

O'Connor predicted onshore Taranaki production would continue to be supplemented by small incremental reserves, which would be hunted by smaller independents with lower costs/medium risk/medium reward approaches to exploration. Competition for gas contracts would intensify, though he believed Kupe could be developed at a significantly lower cost than is being promoted by certain gas sellers.