New Zealand has launched its 2016 petroleum block offer, including three frontier offshore areas where little exploration has taken place.
The offer, released by New Zealand Petroleum & Minerals, comprises offshore blocks in the Northland-Reinga, Taranaki, Pegasus/East Coast and Great South/Canterbury basins, as well as an onshore area in the Taranaki Basin, the government said Monday. The blocks being offered cover a total area of 525,515 sq km.
"The release areas all contain working petroleum systems, and cover various play types both onshore and offshore," said NZP&M Manager Commercial Analysis and Investment David Darby. "The annual petroleum tender creates certainty and consistency for industry and when combined with New Zealand's ease of doing business and low above-ground risk, provides a compelling investment opportunity in today's market."
New Zealand, which has not notched up a discovery since the Tui oil field in 2003, introduced an annual block offer system in 2012. The offer system replaced a regional ad hoc approach under which companies were able to bid for acreage they had identified.
The New Zealand government has been proactively seeking companies to unlock its oil and gas potential and has attracted some industry heavyweights since the annual acreage releases were introduced.
Shell and Anadarko took acreage in 2012, Statoil and Woodside Petroleum entered in 2013, and Chevron and ONGC Videsh came on board in 2014.
Seismic data for the large Reinga-Northland Basin off the northwest off the North Island dates to the 1960s, but the area is still relatively unexplored.
The basin, where Statoil took up acreage in the 2013 and 2014 offers, is believed to be prospective for both oil and gas, and has similarities with the nearby Taranaki Basin, currently the country's only producing oil and gas province.
Two permits were granted to Anadarko in the Pegasus Basin off the east of the North Island in 2012, and in 2014 three 15-year exploration permits in the basin were granted to a joint venture between Chevron and Statoil, with another awarded to OMV.
The Great South Basin off the east coast of the South Island has earned the attention of explorers since the early 1970s, but has not yet yielded any success.
The basin is considered prospective for gas/condensate and oil, with Shell taking up acreage in 2012, and Woodside and New Zealand Oil & Gas committing to the area in 2013.
NINE PERMITS AWARDED UNDER 2015 OFFER
Energy and resources minister Simon Bridges announced the award of nine new oil and gas exploration permits under New Zealand's 2015 block offer last December.
Collectively the permits included committed work program expenditure of NZ$4.4 million ($3 million), with the potential for more than NZ$364 million if all contingent work were to be realized.
Although acreage was also offered in the Northland-Reinga, Pegasus/East Coast and Great South/Canterbury basins in 2015, it was not taken up.
The three onshore and six offshore permits awarded in 2015 were all in the Taranaki Basin.
Four of the offshore permits granted last year were awarded to a joint venture between OMV and Mitsui E&P, and one each went to Todd Exploration and Mont D'Or Resources.
The three onshore permits were awarded to Petrochem.
"Over the past three years, the block offer process has successfully increased petroleum exploration investment," Bridges said in December. "Block offer 2015 consolidates these gains and confirms what the industry already knows -- that the potential for Taranaki is far from reached."
According to the the Ministry of Business, Innovation & Employment, the Taranaki Basin produced 14.448 million barrels (39,584 b/d) of liquids and 190.39 Bcf (521.6 MMcf/d) of gas in 2014, the most recent year for which statistics are available.
Production in the September quarter of 2015 averaged 44,130 b/d of liquids and 476.2 MMcf/d of gas.
Bids for the 2016 block offer must include a work program that demonstrates a technical understanding of the tender area applied for, NZP&M said.
Bids close on September 7, and any permits are expected to be granted in December.
