Earlier this week, New Zealand Oil & Gas issued a new report on the economic potential of drilling for oil and gas off Otago's coast. The new release mirrored a similar company report in July 2015, which at the time described the southern region as the country's ``largest hydrocarbon discovery''.
This week's report estimated Barque may potentially contain more than five trillion cubic feet of gas and light oil, a similar size to offshore Maui in Taranaki.
Eight test wells have been drilled in the adjacent area since 1985, with some shows of hydrocarbons but otherwise none were commercially viable.
Two development scenarios were put forward by New Zealand Oil & Gas.
The first would be offshore production of oil for direct export, with fluids extracted from 10 production wells, with the condensate (light oil) separated and the gas re-injected back into the reservoir, with the potential for the latter to be extracted in the future.
The second scenario would be to take gas from 14 production wells and pipe the natural gas to shore for processing, in addition to oil and lpg production, for use in methanol manufacture, fertiliser/urea manufacturing and for industrial thermal generation
The two scenarios have estimated lifetimes, respectively, of 35 years and 46 years, and construction timeframes of seven and 12 years.
Over 20 years, scenario one would have an annual gross domestic product contribution of $236 million, and for scenario two that figure would be $446 million.
The Ofer Global takeover offer, at 78c per share, is unanimously backed by the board of New Zealand Oil & Gas. An earlier offer by an Australian company of 72c per share was unsuccessful, having lapsed after it did not get minimum acceptances.
Ofer Global acceptances yesterday stood at 21.7%.
New Zealand Oil & Gas has for the past two years been seeking joint venture partners to drill the Barque prospect.
Although Ofer wanted to increase oil and gas exploration in the area, New Zealand Oil & Gas had confirmed Ofer was not the drilling partner it was seeking.
Recent estimates of drilling one test hole off Oamaru, at depths below sea level of 2500m and 3000m, in water depths of 800m, have been about $US80 million to $US100 million ($NZ116mil-
lion to $NZ146 million).
