“The petroleum industry across New Zealand is clearly booming,” Associate Energy Minister Harry Duynhoven told the 2007 New Zealand Oil and Gas Conference in New Plymouth this week.
“The industry is fundamentally optimistic and is actively and constructively engaging in problem solving across a variety of disciplines.”
He said while it was obvious offshore Taranaki was doing well, exploration activities in other regions had also increased, most notably the completion of several large offshore seismic acquisition programs off Northland and Canterbury.
This trend was expected to continue with the recent awarding of Great South Basin exploration permits to three consortiums headed by operators Exxon Mobil, Austrian firm OMV and private New Zealand company Greymouth Petroleum, Duynhoven said.
However, exploration in onshore Taranaki had slowed recently and while some permit holders had enhanced their exploration portfolios through acquisitions, others had relinquished acreage.
“This situation needs to be placed in context of the overall exploration cycle associated with maturing permit holdings in onshore Taranaki,” Duynhoven said.
“It has been recognised for some time that onshore Taranaki acreage requires some rationalisation and restructuring in order to facilitate good exploration practices.”
“There has to be a more lateral approach to capture the current positive mood and innovative thinking by the industry. Faster, more aggressive exploration and subsequent relinquishment have the potential to free up acreage for others,” he said.
The Government’s Crown Minerals was aggregating acreage to support a blocks offer that was intended to prompt “a fresh exploration approach” to onshore Taranaki, the minister said.
This included unlocking the potential of deep (Eocene-aged or older) tight gas plays.
There was likely to be another onshore Taranaki blocks offer sometime next year, he said.
The recent granting of New Zealand’s first coal seam methane mining licence to private company Macdonald Investments Ltd, on the West Coast of the South Island, had also prompted the minister to think about the possibility of strata titles.
“The MIL permit is essentially a petroleum permit over a coal permit; that’s a new and interesting thing for New Zealand,” Duynhoven said.
“With conventional petroleum explorers, some may be focused on tight deep gas in onshore Taranaki, while others may be keen to continue with shallow or other conventional plays.”
Duynhoven said some parts of former Taranaki blocks had essentially lain idle while the permit holders concentrated on other parts of the licence or one particular formation to the detriment of the industry as a whole.
He also said the Government was responding to the worldwide shortage of equipment, particularly rigs, by exercising greater flexibility in granting extensions of durations to work program commitments, which would give explorers more time to contract services.
“This provides some relief, but I would like to stress that this does not change the fact that permit holders are still required to fulfil their work program obligations,” Duynhoven said.
