Southern oil exploration has taken a small step forward with Great South Basin permit holder OMV NZ Ltd placing weather data collection buoys off the coast of Dunedin this month.
Contractor MetOcean Solutions has put a wave-rider floating buoy about 10 nautical miles southeast of Cape Saunders, Otago Peninsula, and is preparing to place a current-measuring transmitter on the sea floor near the buoy.
However, after OMV managing director Wayne Kirk confirmed OMV had contracted placement of weather data collection instruments, he stressed that a final decision on whether or not to drill would not be made until the end of this year or early next.
"This is only a preparatory step, to determine what type of rig could be used," Mr Kirk said.
In July 2007, OMV and rival US ExxonMobil were awarded five-year permits for six of a total 40 GSB exploration blocks, setting the scene for a potential exploration investment of $1.2 billion.
Since gaining their respective permits, both groups have run hydrographic surveys around their Great South Basin (GSB) areas and both consortiums are expecting to make final decisions on drilling during the next seven to 10 months.
However, the GSB is considered "frontier exploration" with notorious seas, weather and potential for icebergs.
Two large icebergs and 18 smaller scattered pieces were seen about 100km off Dunedin's coast in November 2006.
Estimates of drilling costs almost two years ago ranged from $US500,000 ($NZ852,000) a day, or a total $US50 million-$US100 million for one hole.
Mr Kirk said because of depths of up to 1200m in the GSB, the rig type could be a floating semi-submersible, anchored to the seabed, but it was "more than likely" to be an untethered "dynamically positioned [DP]" rig, which uses computer-controlled in-board thrusters to keep it in position.
A DP rig would be the more obvious choice for deep water exploration, but availability could also become an issue. "All the [permitted] acreage held by OMV in the GSB was still under consideration with no one area being targeted at present and drilling could be in depths ranging from 200m or 1200m of water.
"Wherever it is, [using] deep water units can be quite tricky," Mr Kirk said.
In November 2007, the seismic surveys vessels Discover 2 and Western Trident ran surveys for OMV and Exxon respectively, the latter covering 1200sq km.
Both vessels visited Bluff and Dunedin.
The GSB has not attracted major companies to the area since Hunt Petroleum in the mid-1980s.
Between 1976 and 1984, the area was explored by Hunt, Phillips, Placid, Occidental, Husky and Ultramar.
MetOcean Solutions is the contractor collecting the data off Dunedin's coast - primarily wave and current measurements which are transmitted frequently to a website.
Met Ocean offers oceanic data collection services for measuring waves, wind, currents, sediment transport, seabed characteristics and ecology, including use of equipment including wave-rider buoys, ultrasound, radar, pressure sensors and near surface probes, coring, sidescan sonar and satellites through to diver surveys.
Mr Kirk expected the weather data collection would run for about six months.
At a glance
The two consortiums exploring the Great South Basin.-
• US ExxonMobil, the world's largest non-government oil company, with a 90% stake, and a 10% balance held by Todd Exploration New Zealand.
• The partners of OMV New Zealand Ltd, of Austria, include PTTEP Offshore Investment, of Thailand, and Mitsui Exploration and Production Australia, of Japan.