Bids for the re-offered blocks close today.

Associate Energy Minister Harry Duynhoven earlier this month offered them again to the industry, with reduced minimum work requirements, after no bids were received for the three Outer Taranaki blocks and only two of five Offshore Northland blocks were allocated.

Duynhoven said the industry response was disappointing, but understandable given the tight global availability of rigs and seismic vessels.

The government still believed there was potential in the unallocated blocks and he therefore re-offered them for a three-week period, with reduced conditions, in the expectation of receiving further bids.

In the last bidding round, the only new Offshore Northland permits taken up were PEP 38618 and 38619. Both went to operator Origin Energy (50% interest) and Austrian firm OMV (50%).

Industry sources say Origin and OMV picked the best of offshore Northland and doubt if others will express renewed interest.

“The rest of offshore Northland is just too hard, given that Origin and OMV have got the cream,” one executive told EnergyReview.net.

Another executive said he doubted prospective players would bid for the deepwater Taranaki blocks.

“Deepwater is leading-edge stuff, which no players in New Zealand, except for Shell and perhaps Origin or OMV could even contemplate,” he said.

Given that Shell New Zealand had not participated in any new exploration work for several years, and that Origin and OMV already had active exploration and production portfolios in New Zealand, he doubted that anyone would bid for the Outer Taranaki blocks.

New Austral Pacific Energy chief exective Rick Webber told EnergyReview.net he believed that the tyranny of distance from major exploration and production centres and New Zealand’s perceived poor prospectivity offset the country’s fiscal attractiveness.

“We really have to look at the whole package. While the fiscal attractiveness of New Zealand is good, the geology is not necessarily that good.

Webber said further incentives would be needed if New Zealand was to overcome the looming gap between its increasing demand for gas and its declining domestic reserves.

“We have no majors here elephant hunting," he said.

"What we do have are small to mid-sized companies, niche operators, and the government needs to give them every incentive necessary to ensure fields are discovered to replace Maui,” he said referring to the faltering offshore Taranaki field, which used to be the country’s largest energy resource.

The industry is also wondering how many companies bid for the Offshore East Coast and Offshore Taranaki blocks offers that both closed a week ago.

There are rumours of only a few junior players being interested in the East Coast, but no one is expecting Crown Minerals to say anything until the 2006 New Zealand Petroleum Conference in Auckland next month or later.

Crown Minerals has already said it will not be making any announcements until it has completed the assessment and selection processes for all block bids.