Newcomer to join energy hunters

Taranaki Basin exploration vessel. Photo / Supplied

One new international company has been awarded a permit to explore for oil and gas in New Zealand although more than half the blocks on offer were not allocated.

Two significant offshore areas have been awarded to exploration giants in a process Energy and Resources Minister Phil Heatley says has proven the value of a nationwide blocks offer, used this year for the first time.

Houston-based Anadarko has won rights to explore a new area in the Pegasus Basin and Shell with its joint venture partners has been awarded a permit for the Great South Basin, adding to acreage it has surveyed there.

Of the 23 blocks on offer 10 were allocated. Ten blocks attracted no interest, which Heatley said indicated where the interest lay.

"It gives us a clear signal of where companies are interested," he said.

"That's why in block offer 2013 we're more off Northland, the Great South Basin and Canterbury and Taranaki."

In total 10 companies have won bids for 23 blocks put up by the Government with an initial work programme expenditure that could reach $776 million.

"Over the five-year period they're spending $82 million on initial work and that will lead to that greater figure depending on what they find."

The Government assessed each company and consortium for its environmental and health and safety track record.

Heatley said it was pleasing to see more development of portfolios by established operators including big players such as Shell, OMV and Anadarko.

"I'm also pleased to welcome a new international player to New Zealand - Canadian-based East West Petroleum, who have partnered with TAG Oil subsidiary Cheal on three permits in the Taranaki Basin."

Greenpeace says the block allocations showed New Zealand was not regarded by the international oil industry as a prime destination and raised concern about the proximity of the Pegasus permit to the Kaikoura coast, Wellington and the Marlborough Sounds.

"Of the three permits awarded, two are at extreme depths of over 2700m off the coast of Kaikoura and Wellington. This is nearly twice as deep as the Deepwater Horizon disaster site in the Gulf of Mexico," said Greenpeace New Zealand climate campaigner Simon Boxer.

Heatley said there were strict rules for seismic survey work near whales or other marine mammals.

The accepted bids are:

* Anadarko: two permits in the Pegasus Basin.
* Shell, OMV and Mitsui: one permit in the Great South Basin.
* Todd Exploration and Cue Taranaki: one offshore Taranaki Basin permit.
* NZOG: one offshore Taranaki permit.
* Cheal Petroleum and East West Petroleum: three onshore Taranaki permits.
* TAG Oil: one onshore Taranaki permit.
* NZ Energy Corp and NZOG: one onshore Taranaki permit.