High pressure forces oil explorers to abandon site

Tag Oil has vowed to return to its Waitangi-1 well site in Gisborne with a world-first well design, to cope with unprecedented conditions due to the East Coast tectonic plates. PHOTO/GISBORNE HERALD

Tectonic forces are the likely reason for unprecedented high pressure at Tag Oil's Waitangi Valley drill site in Gisborne, forcing the Canadian company to temporarily abandon the well.

Chief operating officer Drew Cadenhead said most hydrocarbon zones have a correspondence between depth and pressure due to the weight of rock on top of them.

Very rarely they were lifted by tectonic forces, leaving high pressure intact.

"The East Coast Basin is the only Basin known in New Zealand to be over-pressured to this degree, and at such shallow depths," he said.

"There are other instances of over-pressured basins in the world, but the drilling-fluid companies working on the East Coast could not find any other example in the world that had such high pressures at such shallow depths - truly an anomaly."

The East Coast was "a new frontier" for oil and gas drilling and the company erred on the side of caution. There was never a chance of a blow-out because of multiple safety measures, starting with heavy mud put down the well as it was being drilled, he said.

"We have other levels of protection to divert the flow of hydrocarbons to a safe flare pit, or in extreme circumstances; we also have blow-out preventers which are rams that slam shut if necessary on the drilling pipe at surface, shutting in any possible free flow.

"Blow-outs are extremely rare in our business these days, thanks to multiple levels of safety barriers, good well engineering, and an understanding of pressure systems we may drill through."

Worldwide experts would be used to design a new well.

"We will definitely be back to drill deeper."

The high-pressure supported the company's view that the East Coast Basin had "huge potential for hydrocarbon discovery".

High pressure meant hydrocarbons would flow at a greater rate, a production advantage.

Tag's drilling rig will be moved to Taranaki while a new well was designed.

Taranaki was the company's "bread and butter play".

"It's what provides us the strong balance sheet that allows us to take a few punts a year at some much bigger prospects. Waitangi Valley was just one of our many home-run swings that we have drilled, and will continue to drill, on top of our shallow oil programme. So we will continue with both those avenues of exploration for many years to come."