Exxon-Mobil has received a 12-month extension to its five-year Great South Basin exploration permit, and has announced it is looking for a buy-in joint venture partner to undertake any test drilling in the future.
With a deadline looming this week, speculation has been rife in the South Island and among industry sources on Exxon's statutory requirement to announce by October 10 whether it intends to test drill in the basin in the coming year, but government permit agency Crown Minerals had extended that deadline to October 10 next year.
"A decision to drill a well in the permit area will be contingent on the outcome of discussions with parties interested in acquiring an equity position in the acreage," Exxon project manager Adem Djakic said in a statement yesterday.
In July 2007, Exxon (90%) and Todd Exploration (10%) made up one consortium, with another headed by Austrian-based OMV New Zealand Ltd, which announced it had gained five-year permits for six of a total 40 blocks on offer for exploring the Great South Basin for oil and gas - touting a possible $1.2 billion spend on exploration during the five-year period between the pair.
Mr Djakic said looking for potential partners was standard industry practice, and helped spread the cost and technical risk "typical of high-risk exploration basins, such as the Great South Basin".
He said a significant amount of money had been spent on the initial exploration phase, which consisted of a seismic survey ship covering 1336sq km of 3D testing and 961km of 2D testing, plus reprocessing of an additional existing 1200km of 2D data.
Exxon had not released a statement on its seismic surveys, but the permit extension would allow for "more effective" exploration of the area, Mr Djakic said.
An OMV spokesman said this week the company had until July next year to make a decision on whether to test drill in the following year, or drop its permit.
Energy and Resources Minister Gerry Brownlee welcomed Crown Minerals's extension, noting the original Exxon programme "was particularly aggressive for a frontier region such as the Great South Basin" and that "obviously there is more work that needs to be done before a commitment to drilling can be made".
