Deepwater Horizon partner seeks to drill in NZ by Christmas

File photo

Deep-sea drilling for oil and gas off the Canterbury coast is a prospect by Christmas, as Anadarko Petroleum, a 25 per cent shareholder in the permit drilled by the Deepwater Horizon rig in the Gulf of Mexico, prepares to make decisions on whether, where, and when to drill.

Anadarko has senior executives in New Zealand this week speaking to journalists and the ENEX oil industry conference as the latest part of a stakeholder engagement programme which has already encompassed key government and iwi contacts.

It faces imminent decisions on whether to bring a rig to New Zealand for this summer's drilling season or wait until 2012/13, with rig availability and interest from other explorers key factors, Anadarko's external communications manager John Christensen said.

The company intended to spend as much as US$50 million mobilising either a "dynamically positioned" or "semi-submersible" rig to drill one or two exploration wells over the course of a single summer drilling season, when weather conditions are best for the activity, and said last year it was committed to the first US$30 million of expenditure on an exploration well.

The American specialist deepwater drilling and production company has interests in three exploration blocks, two in the Canterbury Basin, and one offshore near Taranaki.

Drilling in the Canterbury Basin's Carrack-Caravel block, which Anadarko farmed into with permit-holder Origin Energy, will occur in waters between 1100 metres and 1500 metres deep.

Deep-sea drilling was a well-established oil industry practice before the Deepwater Horizon rig exploded last year, killing 11 and injuring 17 rig workers, and spilled 4.9 million barrels of oil into the Gulf of Mexico, to become the largest ever accidental oil spill.

The disaster turned deep-sea drilling into a rallying point for environmental and climate change activists who opposed seeking new sources of oil and gas from ever more difficult locations.

That saw Greenpeace and a local iwi mount a protest flotilla against a seismic survey carried out by the Brazilian oil explorer Petrobras in the deepwater Raukumara Basin, off East Cape, in April.

Anadarko knows its reputation is already tarnished because of its association with the Deepwater Horizon tragedy, which caused global brand damage to oil giant BP Plc., although the company was not involved in the rig's operation and has been deeply critical of BP since the accident.

Anardarko is suing BP over US$272 million in Gulf clean-up costs relating to the disaster, claiming "BP is guilty of gross negligence or wilful misconduct" in the way it operated the Deepwater Horizon rig.

Texas-based Anadarko specialises in deep-sea oil wells, with interests off the US coast, including in the Gulf of Mexico, Mozambique, Brazil, and West Africa, as well as offshore Taranaki and Canterbury.

It also has extensive onshore production in Algeria, and in exploration and production in onshore and offshore US oil fields, China and Indonesia.

"One of the things that sets us apart is the success we have had in our deepwater drilling," said Christensen.

"We have drilled more than 150 deepwater wells" and had a high strike rate of finding production zones in offshore locations.

All three of the exploration permit areas involving Anadarko are beyond the 12 mile nautical limit, where New Zealand's sovereign territory ends, and are in the 200 mile Exclusive Economic Zone, over which the country can exercise mineral and fishing rights.

The government announced plans last week to step up environmental regulation in the EEZ, under the newly created Environmental Protection Authority.

Safety and environmental protection were top priorities for Anadarko, said Christensen.

"The important thing to realise is that bringing in a responsible operator that puts safety and the environment first can bring a lot of benefits to local communities and the economy."