Associate Energy Minister Harry Duynhoven announced the acreage today, saying the blocks on offer contained two gas-condensate discoveries from the four offshore wells drilled so far - with the 1985 Galleon-1 well having tested hydrocarbons at the rate of 10MMSCF/D of gas and 2300 BOPD of condensate.
Crown Minerals will allocate the five blocks on offer - three offshore and two onshore - on the basis of a competitive staged work program, bids for which close next May 30.
While Duynhoven might hold hopes for the lightly-explored basin, industry commentators are less enthusiastic.
"If you ask me, it's a rather ho-hum affair. Several consortia have drilled wells in the basin, but all have been plugged and abandoned as sub-commercial. There is also the fact that Canterbury is so far away from any existing infrastructure, which could help make marginal finds economic," said one commentator.
"Yes, there's a proven petroleum system, but you have to wonder why Galleon and Clipper (the 1984 Clipper-1 well which had gas-condensate shows) did not contain more hydrocarbons in terms of reserves figures," said a second.
"The Shell BP Todd consortium of the time walked away from the basin and later permit holders, Pacrim Energy and Anschutz Corporation, failed to farm out; either because they did not present their permits attractively enough, or none of the medium sized or major companies could see anything sufficiently attractive there."
However, the second commentator said it would be interesting if Shell New Zealand - which so far this year has exited a Westland Basin permit and sold its interests in the Maari oil field south of Maui - believed offshore Canterbury held enough promise to bid for some of the blocks.
Crown Minerals says the Canterbury Basin covers approximately 55,000 sqkm beneath the Canterbury Plains and offshore across the continental shelf into the deeper waters of the Bounty Trough. Sediment thicknesses locally exceed 6km.
The basin is only lightly explored, but Crown Minerals considers it highly prospective because of the proven existence of an effective petroleum system and the many pre-Oligocene structural and depositional similarities to Taranaki Basin. The southern offshore part of the basin also has strong geological similarities to the adjacent Great South Basin, which has had hydrocarbon shows in four of the eight wells drilled to date.
Only five exploration wells have been drilled to more than 2km depth within the basin, with both Galleon-1 (target depth of 3086m) and Clipper-1 (td of 4742m) having strong shows in Late Cretaceous coal measure sands. The most recent onshore wells were drilled in 2000, targeting sandstone and limestone reservoir targets at 1000-2000m depth, but both were later plugged and abandoned.
Geochemical measurements from available samples, production in the nearby Taranaki Basin, and the Galleon-1 discovery all indicate that Cretaceous coaly source rocks have good potential for oil and gas. Seismic mapping suggest that these rocks are widespread, and that potential sandstone reservoir rocks and extensive mudstone seal rocks were deposited before hydrocarbon maturation and migration.
Crown Minerals says that since the Galleon-1 discovery proved the existence of a viable petroleum system, it is reasonable to expect commercial volumes of hydrocarbons have been generated and trapped somewhere in the basin.