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Editorial comment

A report commissioned by Greenpeace showing computer models of oil spill predictions in case of a Macondo-style blowout off New Zealand’s Taranaki coast has been labelled as “scaremongering” by the country’s Prime Minister John Key.The worst-case scenario report was released following growing excitement over recently announced plans to drill New Zealand’s first deepwater wells in nearly 15 years in the Taranaki and Canterbury Basins.


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Houston-based Anadarko Petroleum Corp., whose exploration success in Mozambique established the African country as a potential gas exporter, plans to drill two deepwater wildcat wells in a joint venture with Australia’s Origin Energy Ltd.

New Zealand’s remoteness, rough seas (the Southern Hemisphere seas around the 40 - 50° latitude are known as the ‘roaring 40s’ due to their gale-force winds), and limited domestic demand for gas given its small population have curbed interest in the region by global exploration companies in the past.

New Zealand has some 18 oil and gas basins, but only one is currently producing, the Taranaki Basin off the west coast of the North Island. It is home to more than a dozen operating fields, and produces around 40 000 bpd of oil and roughly 450 million ft3/d of gas. Output is modest by international standards, but light sweet crude still marks New Zealand’s fourth largest export. Despite this, the country has only seen seven deepwater wells drilled in total, six in 1976 to 1984 and one further in 1999.

However, with the development of floating LNG facilities meaning natural gas could be processed without investing in costly onshore plants, finds are now considered more commercially attractive. That, and the vast unexplored regions, means more overseas companies are taking notice of this island country, which has been identified as a frontier investment location.

Following this international interest, the government’s latest Block Offer 2014, currently in the consultation stage, will offer an unprecedented five proposed offshore areas and three proposed onshore areas, covering some 434 000 km2 in total. The government seems set on adding energy resources to New Zealand’s list of defining characteristics, such as dairy, meat, timber and ‘Tolkien tourism’ (following on from the success of the Lord Of The Rings film trilogy shot on location in parts of the country).

The 2013 Edison Yearbook report of the country’s oil and gas sector, which estimates that NZ$ 2.2 billion is about to be spent on exploration activities, has noted excitedly that the “rubber’s finally hitting the road.”1 The report also highlighted the surge in activity with plans for 98 wells to be sunk in the next 12 months, 27 of them offshore. Companies with their sights set on New Zealand include Chevron, Repsol, Woodside, Statoil and Santos, and others are also known to be looking.

“Part of New Zealand’s attraction is that it’s frontier territory. If we do achieve success, we achieve first mover advantage,” said Alan Seay, a spokesman at Anadarko. Anadarko and Origin may well be the first to drill a deepwater well here in this century, but it is clear that they will not be the last.

Keeping frontier territories in mind, this month’s issue of Oilfield Technology takes an in-depth look at progress on the other side of the world, in the Arctic region. Where, in contrast to New Zealand and its neighbours who are gearing up for summer, the approaching winter in the Arctic Circle means the region is inaccessible due to a shortage of daylight hours and forming sea ice. The drilling season may be over for 2013, but as we learn in our regional report (beginning on p. 10), we can expect plenty of headway in 2014.

Reference
BRADLEY, G., ‘Search for oil in NZ hits top gear’, The New Zealand Herald, "http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11133133 (Accessed 30 October 2013).