Ship-borne seismic survey work is under way and there is an increasing likelihood of commitments being made to drill test wells.
New Zealand Oil and Gas (NZOG) last week announced it had bought a 50% stake, for an undisclosed sum, to jointly explore for hydrocarbons off the coast of Oamaru, around the Clipper prospect in the Canterbury Basin.
NZOG relinquished a separate prospecting permit in the Canterbury Basin area in August last year, but this new joint venture returns the Barque oil and gas prospect into the exploration fold.
NZOG purchased the 50% interest from a subsidiary of ASX-listed Beach Energy, Beach Petroleum (NZ) Pty Ltd, with the intention of jointly undertaking ship-borne seismic testing by October next year. NZOG is to become the operator of the prospect.
Adjacent in the Canterbury Basin, Anadarko has committed to drilling up to two test holes off Oamaru next year, costing $50 million to $100 million.
Further south, in the neighbouring Great South Basin, Shell is expected to announce in coming months whether it will go ahead with a $200 million drilling programme, which it described in April as having a 50:50 chance.
In December, Shell and partners OMV and Mitsui announced they had taken up another Great South Basin permit and committed to a new 2000km 2-D seismic survey, with contingencies to decide later on 1250sq km of 3-D seismic surveying and an exploration well.
NZOG said extensive 2-D seismic surveys were conducted in the Canterbury Basin in the 1970s and 1980s before the only existing well in the Canterbury block, Clipper-1, was drilled by BP in 1984. In the previous eight years, several companies had unsuccessfully drilled eight holes in the Great South Basin.
Other than an unsuccessful 2006 one-hole drilling programme off Oamaru by Tap Oil and Australian Worldwide Exploration's rig Ocean Patriot, all other work since 1984 has been seismic testing by various companies, costing more than $150 million, in both basins.
In August last year, NZOG was operator and 40% shareholder in a permit covering the Barque prospect in the Canterbury Basin, but relinquished that three weeks before the deadline of a ''drill or drop'' decision, for lack of a cost-share partner.
NZOG said it had committed to acquiring ''at least'' 600sq km of 3-D seismic surveys around the Clipper prospect by October next year. Beach was recently granted an extension to the permit incorporating Barque and a related lead.
Beach Energy is a partner with NZOG in the offshore South Taranaki Kaheru prospect.
In the last round of tendering for oil and gas blocks around New Zealand, there were 24 qualifying bids for 13 of the blocks tendered, particularly around the Taranaki region. Bids came from the Netherlands, Austria, Canada, United States, Australia, Japan and New Zealand companies.
Seven permits were awarded in the Taranaki Basin, two in the Pegasus Basin and one (to Shell) in the Great South Basin.
