Austrian oil giant OMV has unveiled one of the most ambitious oil and gas drilling
programmes proposed in New Zealand.

It plans possibly three exploration and seven follow-up appraisal wells off Otago's coast in the Great South Basin (GSB).

The 10 oil and gas prospects are within a 100km-150km arc, southeast of Dunedin.

OMV has applied to the Environmental Protection Authority (EPA) for a marine discharge consent to release contaminants to sea, the application being made public today.

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OMV said in its application the GSB exploration and appraisal drilling programme
potentially included the drilling of a number of wells located within its permit PEP 50119.

"Depending on the outcomes of the exploration drilling, this could include up to three
exploration wells and up to seven appraisal wells,'' the company said.

However, the company went on to say "In the event that no indications of potentially
commercial hydrocarbons are detected in the exploration wells, no appraisal wells would be drilled.''

OMV will be looking for gas deposits and there is a likelihood of finding a small percentage of oil condensate; fine, light oil suitable for making aviation fuel.

Houston-based Anadarko came up empty-handed following one test hole off Oamaru's coast in 2014, which is north of the OMV prospects.

Given the size of the proposed OMV drilling programme, drilling could begin in 2019, and
depending on results, run through to the end of 2030.

A single test well generally costs at least $US100 million ($NZ148.3 million).

OMV has contracted the semi-submersible rig COSL Prospector, which another operator,
Tamarind, will use first in a Taranaki drill programme, which is unusual in that it is self-
propelled.

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While the Coalition Government has stopped issuing any new offshore exploration permits, those acquired before Government-change can continue under the old regime's regulations.

However, once a permit is surrendered, it will not be reissued under the present government.

OMV must commit to drill in the GSB by July 2021, or relinquish the permit.
OMV said the specific location of wells was yet to be confirmed but the primary target was
the Tawhaki structure.

"The first exploration well drilled will target the Tawhaki structure. If a discovery of commercial volumes of hydrocarbons is made, up to five appraisal wells may be drilled in this structure.''

OMV's application said drilling would be completed as a part of one, or more, drilling
campaigns, with possibly different semi-submersible rigs or drill ships used during the
exploration permit lifetime, which could be out to late 2030.

"There are a number of geological structures which may also be of interest in the event that the initial exploration well drilled on Tawhaki structure makes a substantial commercial discovery. "These prospects may also be targeted as a part of future drilling campaigns,'' OMV said.

The application to "discharge contaminants to sea" covers any residue "trace elements of
harmful substances'' remaining on deck after any larger spill clean up.

OMV said the amount was "invisible to the naked eye'', was "conservatively'' about 250 ml, or one cup, and would be collected and diluted before being discharged overboard.
Its "ecotoxicity risk'' to the environment was considered "negligible'', OMV said.

- Otago Daily Times