Australian-listed Origin Energy is bullish on the potential of exporting liquefied natural gas (LNG) from the Caraval prospect off the coast of Oamaru, which is being test-drilled by Houston oil giant Anadarko.
Anadarko is 45 per cent joint venture partner and operator at the Caraval prospect. Origin also has a 45 per cent share and the remaining 10 per cent is held by Discover Exploration Canterbury NZ BV.
Anadarko began drilling at Caraval prospect last month, using the drill ship Noble Bob Douglas, in a month-long single-hole test-drilling programme, estimated to be costing up to US$100 million ($120.4 million).
Last weekend more than 600 anti-oil protesters took to Otago's numerous beaches to criticise deep-sea drilling, calling on the Government to invest in clean and green energy.
The Greenpeace protest was one of many around the South Island, part of its Banners on the Beach campaign.
Origin Energy is reported by newspaper the Australian to have said this week it was looking at opportunities to build its LNG exposure, once the US$24.7 billion Australia Pacific LNG plant it is building with ConocoPhillips at Gladstone, in Queensland, begins delivering cash after 2016.
Speaking after delivering Origin's first-half results, managing director Grant King said although it was early days in the strategy, the big Caravel prospect off Dunedin's coast was of a magnitude to support LNG exports, if the US$50 million-plus well being drilled there was successful, the newspaper reported.
Anadarko's corporate affairs manager, Alan Seay, did not discount King's description of the potential of the Caraval prospect. "Yes, it could be a very significant resource; but that's if we find anything," he said.
The drill ship spudded in, or began drilling, on February 10 and given there had been almost a fortnight of settled weather, Seay said the drilling programme "could come in earlier than the 35 days" predicted.
Anadarko's drill ship spent about 70 days and US$250 million on deep-water drilling programmes off Taranaki, which found no commercially viable hydrocarbons, before the Noble Bob Douglas shifted south.
In the Canterbury Basin, the Noble Bob Douglas is operating in 1100m of water, with the test well drilled to 1700m below the seabed, to a total 2800m. Hydrocarbon finds of commercial quantities could prompt drilling of one or more appraisal wells.
The prospects of Caraval, Carrack, Galleon, Endeavour, Resolution and Barque off the coast from Oamaru have since the 1970s attracted the most attention of explorers in the South Island, with five shows of oil or gas, but none in commercially viable quantities; the last being in 2006.
In last year's block offer tendering round by Government permitting agency New Zealand Petroleum & Minerals, listed New Zealand Oil & Gas (NZOG) was awarded the Galleon permit, next to its existing stake in the Clipper prospect.
NZOG has recently completed a ship-borne hydrographic survey of the area, understood to have cost between $8 million and $10 million.
The 10 per cent shareholder in the Anadarko-Origin Energy project at Caraval is a subsidiary of Netherlands-based Discover Exploration BV, which is headquartered in Amsterdam, but maintains a Wellington address. Otago Daily Times