More offshore exploration in the Great South Basin has been confirmed with the New Zealand subsidiary of Austrian oil giant OMV announcing yesterday Shell New Zealand will become its majority joint venture partner; with a further $50 million going into more seaborne seismic data acquisition.
Four years ago, the Great South Basin was touted as the latest "frontier" exploration area in the country when oil giants Exxon and OMV were separately awarded permits which could have attracted up to $1.2 billion in exploration spending; but Exxon pulled out in October citing technical difficulties and lack of a joint venture partner.
OMV has already accumulated about 19,000km of 2D data on the Great South Basin and the up to 3000sq km of new 3D data will give a more detailed geological portrait, but the oil executives would not be drawn on releasing information about the size of potential prospects yesterday, citing confidentiality.
OMV New Zealand managing director Peter Zeilinger said decisions on drilling were "not done overnight", and outlined that once data capture was completed by March 2012, the rest of that year would be spent processing it, then 2013 would be taken up analysing the data; before a second term of permit commitment arose.
Shell executives yesterday said it was "unfortunate" to be making the joint venture announcement as Shell battles a high-profile North Sea oil leak, while much of the presentation targeted reassurances over health and safety, the environment, deep-sea drilling techniques and experience and forthcoming consultation with iwi and communities.
An estimated 200 tonnes of oil has leaked from Shell's North Sea Gannet Alphaplatform, about 122km east of Aberdeen in the North Sea, during the past week, and while reduced, the spillage has not been completely stopped.
In the wake of local iwi and Greenpeace protesting against Brazilian oil giant Petrobras collating seismic data off East Cape in April, Shell chairman in New Zealand Rob Jager said yesterday there appeared a "likelihood" of similar protests in the south.
While Greenpeace was "within its rights" to protest, the environmental organisation would not be included in consultation rounds as it was not considered a stakeholder in exploration, he said.
With OMV and Shell potentially to test drill at depths of 800m to 1200m in the Great South Basin, Mr Jager said Shell had "developed capping systems for work globally" and in the event of any clean-up liability, Shell "would foot the bill. Fullstop", he said.
On the much over-written question of the likelihood of an imminent windfall for southern companies, Mr Jager cautioned that "from an idea [today] to delivering first product could be 10 years away. I don't want to give the wrong expectation [to southern businesses]," he said during the briefing.
Under the joint venture, up to $50 million will be spent on contracting the state-of-the art hydrographic vessel, the 89m Polarcus Alima, to survey up to 3000sq km of two permits south of Dunedin between December and March; a third permit area to the west having been relinquished.
OMV, which has spent about $50 million during the past four years on seaborne data acquisition, will be the operator during the next acquisition round, with Shell becoming the operator after that period.
In early July, OMV received a two-month deferral on its requirement to make a decision to test drill in the Great South Basin, saying yesterday it had needed more time to review data and contract a hydrographic vessel.
• In separate permit holdings in the Canterbury Basin, Houston-based Anadarko Petroleum Corp earlier this month deferred its drilling programme until summer 2012 because no rigs are available to bring to New Zealand. In July last year, Anadarko pledged about $US30 million to become a 50% joint venture partner alongside permit holder Australian listed company Origin Energy; planning to test drill in up to 1500m of water about 65km off the coast from Dunedin.
Great South Basin
Joint venture partners
• Shell GSB - new stakeholder 50%
• OMV New Zealand (of Austria) - from 36% to 18%
• PTTEP New Zealand (of Thailand) - from 36% to 18%
• Mitsui E&P Australia Pty (of Japan) - from 28% to 14%
