Tag Oil to stick with East Coast

By Kristine Walsh, Lawrence Gullery

2 comments


Tag Oil has pledged to continue its permitted exploration programme on the East Coast despite losing its partner, US company Apache, which has decided to pull out of the work the two started in 2011.

Apache agreed to spend up to $120 million to explore and drill within Tag's permitted areas around Gisborne, Te Karaka and Hawke's Bay.

Tag's chief executive Garth Johnson said Apache would pay all costs and expenses incurred or committed in phase one of the programme, which included drilling four exploratory wells on the East Coast.

"Whether we like it or not, this is the nature of the oil and gas exploration business around the world and we will treat it as an opportunity and move on.

"We will continue with the work programme on the East Coast in the same careful, methodical and safe way that we have carried out our work programmes in Taranaki."

Mr Johnson said Tag would continue to "work openly" with councils, the Government and key groups on the East Coast.

Apache advised the Taranaki-based Canadian company Tag Oil last week that it would not move to phase two of the exploration programme.

The news was "sprung" on Tag executives at a meeting in Vancouver, said Tag's New Plymouth-based chief operating officer, Drew Cadenhead.

"I can't speak on Apache's behalf but my understanding is that there were two main reasons for their withdrawal," he said.

One was Apache's decision to pull out of many areas around the world to concentrate on its core operating areas in North America.

"They were also frustrated with the regulatory regime in New Zealand and were concerned that planned changes to that regime would not happen fast enough to push the project forward."

- HAWKES BAY TODAY

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n3 at 19 Apr 2014 13:53:02 Processing Time: 676ms