Upsurge in oil, gas finds sparks $160m investment

By FIONA ROTHERHAM

An estimated $160 million is being invested in drilling for oil and gas around New Zealand this year.

The exploration upsurge will see a record 26 wells drilled this year, compared with only 10 in 1999.

New discoveries such as Rimu and Pohokura in Taranaki have lifted overseas perceptions of New Zealand's prospectivity.

Under the Acceptable Frontier Offer introduced by Crown Minerals in 1995, exploration companies are required to drill in year three of the five-year permit or surrender the licence. Many permits are now nearing the end of the third year.

"Seismic work done in the past two years has got them to the point of finding that things look attractive enough to drill," said Clyde Bennett, NZ sector manager, petroleum.

Taranaki is the main focus but five wells will be drilled on the East Coast and two in rural Canterbury.

Industry attention centres on three wells south of Hawea that Houston-based Swift will drill back to back from next month.

Swift has said it could be one of NZ's largest discoveries, estimating Rimu's reserve potential at between 20 and 100 million barrels of oil and Kauri (yet to be tested) at between 200 and 500 million barrels of oil.

Swift will drill two appraisal wells at Rimu and a wildcat well in the Kauri prospect.

Houston-based GEL Exploration plans to drill its first well in New Zealand, Crusader-1, in August on the outskirts of New Plymouth.

North American-based Indo-Pacific, holding the most onshore acreage under permit, will drill three wells back to back onshore Taranaki, from October to February.

It is also about to spud the Speedy-1 well on the East Coast, close to the national gas pipeline.

Canadian-based AMG Oil has just upped its interest in an onshore Canterbury Basin permit from 30 per cent to 80 per cent.

By agreement with partner Indo-Pacific, AMG will earn the additional interest by funding the $2 million costs of drilling and testing two exploration wells in September.

Westech Energy, wholly owned by Energy Corporation of America, plans to spend $US25 million drilling eight onshore and offshore wells this year and early next year.

Westech and joint venture partner Orion have made two significant gas finds, Kauhauroa and Tuhara, near Wairoa.

President Ed Davies said they would drill the Tuhara-2 well in August and a further appraisal well, Kauhauroa-6, later in the year to better estimate potential reserves.

The Waitaria-2 well, just outside Gisborne, would be redrilled in September after another operator failed to reach planned depth due to engineering difficulties.

All three offshore wells on the under-explored East Coast would be drilled early next year by Westech, after seismic surveys covering 6000 sq km identified 12 hydrocarbon prospects.

Westech aims to spud its Windsor-1 well in August in northern Taranaki and immediately after drilling the Maketawa-1 well, east of Ngatoro.

Fletcher Challenge Energy will follow its Pohokura success with an onshore well at Tuihu, east of the Tariki field in Taranaki, near the end of the year.