Prospect ready to explore

A large petroleum prospect, which could potentially produce one trillion cubic feet of gas and millions of barrels of oil condensate and LPG, has been identified 70km off the coast of Timaru.

The Crown Minerals Department of the Ministry of Economic Development is promoting the Corvette prospect overseas as available for exploration.

The area is about a quarter of the size of the Maui field, which produces 70 per cent of New Zealand's hydrocarbons.

Crown Minerals is seeking bids for five exploration blocks, onshore and offshore, covering 30,000sq km in the Canterbury Basin.

The Canterbury Basin has been only lightly explored but is considered highly prospective because of the existence of an effective petroleum system.

Petroleum exploration began in the Canterbury Basin in 1914 with an onshore well drilled at Chertsey, followed by another near Oamaru in 1954 and several others in the 1960s and 70s.

Two wells were drilled in mid-Canterbury in 2000 after seismic surveys identified several prospects, but neither encountered hydrocarbons.

Offshore, more than 15,000km of seismic data has been acquired and four wells have been drilled, the last two in the early 1980s.

One of the last two wells drilled flowed gas at a rate of 10 million cubic feet a day and produced 2300 barrels of condensate a day, but was considered uneconomic at the time and plugged and abandoned.

Further seismic surveys in 2001 identified the Corvette prospect.

Kevin Corbett, of the Denver-based Anschutz Exploration, said his company relinquished its permit for the area in June last year because of "concern that there was an insufficient market for gas in Canterbury to realise a profit given the costs for exploration and development".

"In general terms the prospect is equivalent in size to the recently discovered Pohokura field in the Taranaki basin, but it is a prospect and as such unproven."

Corbett said it would cost up to $45 million to establish if the prospect was an accumulation of gas and liquid hydrocarbons.

Clyde Bennett, manager of the petroleum business unit for Crown Minerals, said there had been a good response to the overseas promotion, but typically bids would not come in until a few days before the tender process closed at the end of May.

Asked if Crown Minerals would try to fast track exploration in New Zealand following the announcement the Maui Field would run out earlier than expected, Bennett said the ministry had been working for many years to increase the level of exploration in New Zealand.

He said the geology offshore in the Canterbury Basin was good, with two out of the four wells drilled providing gas condensates.

- NZPA