Taranaki oil find sparks interest

By CHRIS DANIELS energy reporter

Interest is growing in the possibility that huge, untapped oil reserves are lying beneath deep water off the Taranaki coast.

Results of an ambitious deepwater seismic survey conducted this year are being published to encourage international oil giants to explore the deep waters of the Taranaki Basin.

One of New Zealand's top seismic scientists, Chris Uruski, has been invited to present a paper to the world's biggest deepwater drilling conference in Houston, Texas.

Mr Uruski, who works for the Institute of Geological and Nuclear Sciences, also released details of the survey to scientists at a geology conference in Australia last week.

He told the conference that he and his colleagues "hazard a guess that the deepwater Taranaki Basin may contain as much as 20 billion barrels of trapped oil".

Presenting papers to conferences is not the only way interest in offshore prospecting is being promoted.

The information gathered in the deepwater survey is owned for five years by Norwegian firm TGS-Nopec, which surveyed the deepwater area with the Institute of Geological and Nuclear Sciences. TGS-Nopec will sell it to various oil companies.

Once the five years is up, the information will become the property of the New Zealand Government.

Companies which are successful in finding oil pay royalties to the Government.

Ministry of Economic Development spokesman Lindsay Clark said the deepwater section of the Taranaki Basin would soon be divided into blocks and then put up for a bidding round.

Companies win the right to explore for oil or gas in one of these areas not by putting up money, but by having the best work programme planned.

That means a company wanting to drill in the first year of having the block would win over a company planning to drill in the second year.

Advertising in oil industry magazines and journals is another way the ministry hopes to stimulate interest in New Zealand oil fields.

While the prospects of deepwater drilling are occupying the minds of some in the oil industry, exploration is continuing closer to home.

The Indo-Pacific oil company was due to start drilling at its Kahili 1 site, northeast of Mt Taranaki, at the weekend.

Indo-Pacific is the sole company taking the risk on the drilling, which is rare in the oil business.

Companies usually join forces to share the expense and the risk of exploratory oil wells.

But Indo-Pacific does not have to look far back to see a successful solo venture in Taranaki.

It drilled the Goldie-1 well by itself, after former partners Shell and New Zealand Oil and Gas wrote off the prospect.

Going ahead with drilling by itself proved worthwhile. Since being uncovered, the Goldie-1 well has been steadily producing between 500 and 700 barrels of oil a day.

Although not large by international standards, Goldie's reserves are now estimated at between 500,000 and 1.5 million barrels.