The Ministry of Economic Development unit said yesterday the Great South Basin Blocks offer would formally open next February 1 and close August 31, 2006.
The almost 9000 sq.km offered – excluding existing licences and permit applications – has been divided into identical graticular blocks measuring 80km by 113km, according to Crown Minerals group manager Adam Feeley.
“There have been repeated requests from major international companies regarding the timing of bidding rounds and the number of blocks to be offered in the Great South Basin and so we have decided to confirm what areas will be available and when,” Feeley said.
“We believe that it is likely a number of large companies will want to establish a presence in the Great South Basin.
“We are therefore offering enough blocks to ensure there are opportunities for all bidding companies, while also offering successful bidders an exploration area large enough to ensure the prospect of large scale potential that the region requires.”
Feeley said Crown Minerals recognised that any commercial finds in this remote region would take longer to develop than in other basins recently opened up for exploration.
“However, the Great South Basin is commonly acknowledged to have enormous potential," Feeley said.
"The sooner large scale exploration commences there, the sooner we will be in a more informed position to know how the basin might contribute to New Zealand’s long-term energy needs."
The Petroleum Exploration and Production Association of New Zealand (PEPANZ) welcomed Crown Minerals’ announcement.
“We are pretty excited about this opening up of another frontier region and we look forward to working with Crown Minerals to ensure this country’s petroleum resources are effectively and cost-efficiently developed as quickly as possible,” PEPANZ executive director Mike Patrick told EnergyReview.net today.
“If this region turns out to have as much potential as some people say, it opens up the opportunity to greatly increase our energy self sufficiency – something that has drastically dropped in the past few years from around 50% to now under 17%."
Energy analyst Chris Stone also welcomed the opening up of a frontier exploration region that has had little exploration for the past 20 years.
“I am excited about the basin, there’s huge potential but there also huge risks,” Stone, head of research for investment bank McDouall Stuart, told ERN.
Much of the area was in deep water, which was unsuitable for semi-submersible drilling rigs, so exploration would need to be done by large expensive drill ships.
“I really do hope we get some sizeable companies taking up the Great South challenge. Although exploration levels here are higher than they have been for decades, we still need to establish more of a sustainable exploration industry," Stone said.
“We also need to realise that it will always remain a challenge to attract companies and funds here, as New Zealand will always be a very small player in the global exploration scene."
Crown Minerals will make available copies of re-processed data relating to these blocks, together with 3300km of 2D seismic data to be obtained this summer under the government-sponsored DUN 06 seismic survey.
The MED unit also wants industry feedback regarding the desirability of bidding for combined blocks and the method by which any combined bidding would be assessed.
Geological and Nuclear Sciences hydrocarbons marketing manager Chris McKeown said the Great South Basin was one of New Zealand's largest basins and contained up to 8km of Cretaceous-Cenozoic sediment.
Exploration during the 1970s and 1980s resulted in 35,000km of seismic data and eight exploration wells being drilled, with hydrocarbon indications in four of the eight wells, including a Hunt Petroleum gas-condensate discovery of 461bcf.
