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October 2017 NZ O&G Wrap

By Neil Ritchie

The New Zealand oil and gas sector, though smaller and quieter than it was two years ago, is still engaging in some spring and summer activity – from the shooting of at least one significant offshore seismic survey that could last until mid-2018 to some onshore exploration drilling.

Global oil industry services company Schlumberger​has applied to survey up to 5000 square kilometres of the Taranaki Basin as part of a larger area encompassing about 18,840 square kilometres. The Taranaki Basin work will cover the Maari-Manaia oil field and the Maui and Tui gas-condensate (light oil) fields operated and majority owned by Austrian giant OMV, Shell New Zealand, and Australasian oil and gas business Tamarind Management respectively.

It is known that offshore seismic personnel may start the three-dimensional (3D) survey during November and work may continue for up to six months.

The 2017-18 offshore programme will be another “spec seismic survey” -- where Schlumberger has non-exclusive proprietary rights over all data acquired and can then sell those rights to multiple explorers – as it has done with earlier surveys.

The latest survey follows Schlumberger’s extensive 3D programme last summer over parts of the offshore East Coast and Pegasus Basins, covering about 64,000 square kilometres, from just south of Napier down to Kaikoura.

As before, Schlumberger will be acquiring 3D data over the three previously mentioned producing fields, as well as nearby exploration acreage – all of which either hold potential for further production or opportunities for future exploration.

And, as with earlier surveys, Schlumberger will be looking for previously overlooked pockets of oil (Maari-Manaia) and gas (Maui and Tui) that could hold quantities of hydrocarbons that the respective partners may believe could prove commercial and be developed in the future -- thus extending the economic lives of these fields.

As well, Schlumberger will be acquiring some seismic over some exploration acreage, hoping the results will be attractive enough to entice energy companies to commit to further acquisition and interpretation of new data, perhaps leading to new exploration drilling late this decade or early next.

And the Environmental Protection Authority held hearings in New Plymouth during early October to consider operator Shell Taranaki’s applications to use a jack-up rig at its Maui gas-condensate field in South Taranaki. 

The latest (marine and discharge consent) applications are an extension of the marine consent granted by the Environmental Protection Authority (EPA) in 2015 for some exploration and/or maintenance work (well workovers) at the two Māui production platforms. The latest consent applications provide “a broader range of options” for the Maui partners – Shell New Zealand, Todd Energy and Austrian global company OMV – “for potential future activities” involving a jack-up rigat the Maui platforms. 

The EPA is the Government agency responsible for considering applications for marine and discharge consents for this country’s Exclusive Economic Zone and is due to release its decision on the Maui consent applications in early November.

Any kind of programme involving a jack-up rig is likely to cost several tens of millions of dollars and last several months. It is understood the scheduled arrival of a jack-up rig is likely to be either late 2018 or early 2019 and will be a “shot in the arm” for the offshore support sector.

As well, Canadian listed junior TAG Oil and its Aussie listed minnow Melbana (formerly MEO) have recently committed to drilling the Pukatea prospect in the central Taranaki licence PEP51153 (the old Puka permit) in early 2018, targeting the shallow Tikorangi limestones situated directly below the Puka oil pool. The presently undeveloped Puka oil find was discovered in 2012.

Preparatory works for Pukatea have started, with wellsite and access road upgrades underway, and the joint venture has secured Webster Drilling’s Nova-1 rig for the programme.

Lastly, New Zealand Oil & Gas independent directors have unanimously recommended shareholders accept a revised bid (up one cent from its first offer to NZ78 cents per share) by minority shareholder OG Oil & Gas (Singapore) instead of an earlier lower one (NZ72 cents) from  Zeta Resources, which NZOG’s independent directors have already described as too low and lacking merit.

Zeta has said it wants to cut NZOG's overheads and views further exploration as risky. OGOG, however, says it believes strongly in the potential of NZOG’s assets and is “excited to have the opportunity to invest in New Zealand”