KEY POINTS:
New Zealand-owned Greymouth Petroleum is joining the hunt for oil and gas in the Great South Basin.
Associate Energy Minister Harry Duynhoven said today that Greymouth Petroleum had committed to a $23 million work programme in a permit area covering a near-shore and on-shore area of Southland.
Greymouth Petroleum chief operating officer John Sturgess said the company considered the gas and oil potential of the area to be significant.
"Greymouth's objective is to be the first company to deliver cheap fuel to backbone energy users in the South Island," he said.
The company had successfully operated a market in the North Island for spot gas since October. It anticipated the market for spot, excess and shortfall gas would develop further in the next 12 months.
The news comes a fortnight after the announcement that two consortia had been awarded permits for other parts of the basin and were expected to spend around $1.2 billion on exploration.
ExxonMobil New Zealand (Exploration) Ltd, of the United States, leads one consortium which also includes New Zealand company Todd Exploration Ltd.
The other is led by OMV New Zealand Ltd, of Austria, and includes PTTEP Offshore Investment Company Ltd, of Thailand, and Mitsui Exploration and Production Australia Pty Ltd, of Japan.
Areas granted to the OMV-led consortium are immediately to the east and south of that granted to Greymouth Petroleum.
Mr Duynhoven said that given the low level of activity in the permit area awarded to Greymouth Petroleum, exploration activities would provide a better understanding of the geology and prospectivity of the area.
Greymouth Petroleum's area covers the northern margin of the Great South Basin and covers 15,740sq km, of which 7700sq km is offshore.
The private company's permit area covers Winton, Gore, Invercargill, the Catlins and a small portion of Stewart Island, including an area of reported oil seeps in Halfmoon Bay.
During the first three years of the permit programme, studies would be conducted and new seismic data acquired, ahead of well drilling, Greymouth Petroleum said.
The company's present gas and oil production comes from onshore Taranaki fields, and it has other exploration permits in that area.
- NZPA
