Deep-water prospecting may resume

Offshore deep-water oil and gas exploration drilling in the Great South Basin is back on the cards, after Austrian-owned OMV applied for a marine consent to operate in the southern ocean.

No final decision has been made on drilling in the Great South Basin, which lies to the east and far south of Dunedin, but a rig to be used for drilling in Taranaki could come south.

OMV's external relations manager Janet Carson said when contacted a notified consent application had been lodged with the Environmental Protection Authority, but that would not go public until April 10, so she could release few details yesterday.

She confirmed consultation in Otago and Southland would include iwi and hapu, the Department of Conservation, regional councils and fishing industry organisations.

OMV has to make what is known as a "drill or drop" decision - to either drill in the South Basin by July 2021 or drop the permit.

The last drilling was by Houston-based Anadarko off Oamaru in 2014, part of an unsuccessful $400million campaign.

Mrs Carson said OMV had signed a contract to lease COSL Prospector, a mobile offshore drilling unit.

"It will be the most technologically advanced mobile offshore drilling unit to ever work in New Zealand waters," Mrs Carson said.

About $NZ500 million would be spent on investment around the Taranaki region.

"Depending on the timing, there will be an option to use it [rig] in the Great South Basin," she said.

About 11 test holes had been drilled around the Canterbury and Great South Basins from the 1970s to 2014, but none was found to be commercially viable.

While the coalition Government has banned new offshore drilling permit applications, it still recognises the rights of permits issued before the new regime.

As of a year ago, there were 31 active oil and gas exploration permits, of which 22 were offshore.

In October last year OMV was granted a two-year extension to its Great South Basin permit, pushing the exploratory drilling date out to July 2021.

Separately, Tamarind Resources is bringing the COSL Prospector to New Zealand for its Tui drilling programme later this year, BusinessDesk reported.

New Zealand Oil & Gas also has permits for two prospects - Clipper, off Oamaru's coast, until April this year, and Toroa, south of Dunedin, until April next year. Permit extensions are being sought. Beach Energy now has the permits for Anadarko's former Carrack-Caravel, also off Oamaru.