Crown Minerals has awarded ExxonMobil and Todd one GSB licence, PEP 50117, while a joint venture led by Austrian energy giant OMV has picked up three new licences, PEPs 50119, 50120 and 50121.
While the Government talked up the GSB results, industry sources said that to have only five bids for the 40 blocks offered showed how difficult it still was for New Zealand to attract new majors and major new E&P investment.
Shell has been the only major operating in the New Zealand E&P industry for the past 18 years or so.
"The intensity of work proposed for the Great South Basin is unprecedented in New Zealand’s history and will effectively double the amount of investment in oil and gas exploration here over the next few years," Associate Energy Minister Harry Duynhoven said this morning.
He said international investors were preparing to spend over $NZ1 billion exploring the vast Great South Basin over the next five years.
The Petroleum Exploration and Production Association of New Zealand (Pepanz) was a little more circumspect.
“I am pleased, but not very pleased, with the results that will at least see one more of the so-called super majors operating in New Zealand,” Pepanz executive officer John Pfahlert told PetroleumNews.net from Wellington.
“However, the presence of several large international exploration companies should add a new dimension to exploration operations in New Zealand.”
Duynhoven said the two successful joint ventures were between ExxonMobil and Todd Exploration; and OMV, Japan’s Mitsui Exploration and Production, and Thailand’s PTTEP Offshore Investment Company.
ExxonMobil and OMV will act as operators of the GSB permits. Mitsui is already a partner in the Tui oil fields and several other offshore Taranaki permits, including some operated by Australian Worldwide Exploration, but this is PTTEP’s first venture in New Zealand.
Duynhoven said the interest of major international oil companies indicated the high potential of the basin.
"It is one of world’s hot spots for exploration. The data indicates the potential for commercially viable finds, which could have significant future benefits to New Zealand."
The New Plymouth MP said a large number of companies from around the world took interest up to the final stages of the tender round, with many expressing strong interest in development of the basin, but only five bids were received.
However, it was possible that as new data became available they would seek interests in the remaining unallocated areas of the basin.
Pfahlert said that while Southland would likely see most of the GSB exploration money, the rest of the country, particularly Taranaki with its oil and gas personnel and support industries, would also benefit.
He added that the key factor was the large size of the geological structures already identified suggested the potential for world-class discoveries – mega trillion-cubic-feet gas finds or 100 million barrel-plus for oil.
Todd Energy managing director Richard Tweedie said his company was pleased to have the opportunity to work with ExxonMobil.
"We, and New Zealand, are privileged to have their leadership in the Great South Basin exploration program . . . they will bring world class expertise to exploration in the Great South Basin,” Tweedie said.
He said ExxonMobil and Todd had committed to a major 2D & 3D seismic acquisition program that would provide the necessary technical input to identify the potential of the Great South Basin licence acreage awarded to the two partners.
Energy Minister David Parker said the work would assist the Government's energy goals.
"Assuming exploration success, the country stands to earn significant revenue from royalties and taxes flowing from this investment, and it will assist in ensuring security of energy supply.
"Although the world is working to lessen its reliance on fossil fuels, we will be dependent on oil and gas for some time to come. It is in our economic interest that the oil we use comes from local sources if possible,” he added.
Last December Pfahlert said the number of GSB bids would be the first real test of the Government's national energy strategy, which favours renewables over gas for electricity generation.
Other factors – including last year’s out-of-court settlement between Crown Minerals and ExxonMobil regarding which owned GSB seismic data that ExxonMobil acquired from Bounty Oil – might also have been negative factors.
The GSB measures about 100,000 square kilometres and Hunt Petroleum found hydrocarbons in four of the eight wildcat wells it drilled there between 1976 and 1984.
