Oil and gas producer Tap Oil - which holds permits in the southern Canterbury Basin off Oamaru - expects to drill a record 35 wells in Australia and New Zealand this year as part of a A$40 million ($43.75 million) programme.
Tap Oil New Zealand asset manager Clyde Bennett said
a hole might be drilled at one of two oil prospects about 30km offshore in the Canterbury Basin, Galleon and Barque, during the second half of this year.
The proposal - first mooted last May - by Australian 50-50 joint venture companies Tap Oil and Australian Worldwide Exploration (AWE) will be the first southern oil rig venture in 20 years.
A BP, Shell and Todd combined venture capped the Galleon 1 test well in 1985.
The costs have been estimated at A$5 million to bring a rig to New Zealand and a further A$10 million to A$15 million to drill.
Bennett said no contract to lease a rig had been signed but there was potential to co-hire a rig with other companies.
Tap Oil visited Port Chalmers and Timaru's PrimePort last year, but a final decision on where the company would be based depended on whether the northern Barque or southern Galleon prospects were drilled. Last year, oil rig Ocean Patriot was towed from South Africa to work in Bass Strait before coming to New Zealand to drill one hole off the coast of Wairarapa and move on to Oamaru.
However, its use in the South Island was deferred because of a busy schedule in Australia and is is now understood to be working around Timor.
Tap Oil has two onshore fields in Taranaki as well as the offshore Wairarapa and North Otago prospects. In August 2003, Tap and AWE were awarded the rights to explore the 6.6sq km area between Dunedin and Oamaru.
In 1985, the Galleon South prospect, adjacent to Galleon 1, returned test flows of 2200 barrels of oil a day and maximum test flows of 10 million cubic feet of gas for the consortium.
It was capped as uneconomic, but with the demise of Maui reserves and withdrawal of Shell from exploration in 2003, Galleon South could now be viable.
This year, Tap is targeting 50 million barrels in Western Australia's offshore Carnarvon Basin alone, from where 98 per cent of its current production of 6000 barrels of oil a day comes.
Bennett said if Tap found commercial reserves it would consider returning the gas into the prospect and taking the oil.
- NZPA
Oil and gas producer Tap Oil - which holds permits in the southern Canterbury Basin off Oamaru - expects to drill a record 35 wells in Australia and New Zealand this year as part of a A$40 million ($43.75 million) programme.
Tap Oil New Zealand asset manager Clyde Bennett said
AdvertisementAdvertise with NZME.