Consultant John Bay has been engaged as gas development manager for the largely hydro and geothermal-based MRP, which earlier this year announced it was joining Contact in establishing a drilling fund designed to accelerate gas exploration activities in New Zealand.

The former Fletcher Challenge Energy business development manager is responsible for all MRP’s gas-fuel supply issues, particularly its participation in the drilling fund and sourcing future gas supplies for its Southdown cogeneration power station in south Auckland.

“I will be involved in anything to do with gas, drilling, contract negotiations pipeline transmission issues, etc. I am currently focused on getting the drilling fund off the ground, which is conditional on convincing other parties to join,” Bay told EnergyReview.Net from Auckland.

Contact and MRP have already committed NZ$20 million each to the fund, though it will only go ahead if other parties participate, bumping the total available for drilling projects to at least NZ$80 million. “We have had several interested parties but no one has signed anything yet.”

Bay will not be involved in any non-gas issues, such as any possible appeals by MRP and fellow government–owned Genesis Power against a recent Environment Court decision cutting Tongariro water rights from 35 years to 10 years. ERN yesterday reported that Genesis and MRP were considering appealing the court decision, which could affect not only the Tongariro and Waikato power stations but add uncertainty to future energy supply options.

“Traditionally, most exploration companies have only looked to other oil and gas explorers when seeking to farm-out their exploration prospects. MRP believes it can play an important role in gas exploration, either via a project funding mechanism, such as the gas exploration fund, or by participating directly as a joint venture partner,” said Bay.

“One thing many oil and gas companies overlook when thinking about possible joint venture partners is the background and experience that some of the large industrial gas users may be able to bring to a joint venture. This often goes beyond being just a possible gas purchaser and MRP has a lot of geothermal exploration and drilling experience that can quite easily be transferred to gas exploration.”

MRP’s existing geothermal stations are the Rotokawa and Mokai projects in the central North Island.

It is expected Bay and Contact upstream gas specialist Alex McAlpine - another former FCE and Spectrum Exploration executive - will work closely on the joint drilling fund to, hopefully, finalise a likely onshore exploration programme for this coming summer.

Contact chief executive Steve Barrett told the 2004 New Zealand Petroleum Conference in Auckland last March that the drilling fund would invest in exploration opportunities that had the potential to produce significant quantities of gas in the near term.