More exploration, less litigation, Minister tells NZ conference

NEW Zealand's rapidly improving position in international petroleum exploration and production is highlighted by the current quartet of offshore Taranaki projects, particularly the Tui Area oil field development, Associate Energy Minister Harry Duynhoven told the 2008 New Zealand Petroleum Conference yesterday.
More exploration, less litigation, Minister tells NZ conference More exploration, less litigation, Minister tells NZ conference More exploration, less litigation, Minister tells NZ conference More exploration, less litigation, Minister tells NZ conference More exploration, less litigation, Minister tells NZ conference

Duynhoven - in opening the 10th conference in Auckland yesterday morning - told the 400-plus delegates New Zealand's liquids production had been declining since the offshore Taranaki Maui field peaked in 1997.

However, the Tui and Maari oil projects, coupled with the Pohokura and Kupe gas developments, were scheduled to reach peak production by about 2010 and bring the equivalent of 140 million barrels of new reserves into the market, he said.

Duynhoven said smaller onshore Taranaki fields such as Cheal, Cardiff, Moturoa and Turangi were also helping to boost New Zealand's energy security.

"Equally importantly they will widen our economic diversity, give a positive message that New Zealand has good prospectivity, show there are good commercial gains to be made from both commodities, and give a huge boost to the Taranaki economy," he said.

Duynhoven said Tui operator Australian Worldwide Exploration and partners had "an outstanding achievement" in taking less than three years from the discovery of the Tui, Amokura and Pateke oil pools to commercial production. Tui has produced over nine million barrels in seven months of production.

"Quite remarkable and surely a feat that highlights that petroleum discovered in New Zealand can be commercialised in a very short space of time," he said. "This achievement shows New Zealand in a very positive light to potential investors."

The Minister also cited the involvement of major companies ExxonMobil and Austrian firm OMV in the Great South Basin - where their joint ventures are planning to spend $NZ1.2 billion over the next five years.

"This basin is clearly one of the world's hot spots for petroleum exploration," Duynhoven said.

He noted that the New Zealand exploration industry was diversifying into shale plays on the East Coast, and coal seam methane in Waikato, Westland, Otago and Southland.

Duynhoven said Crown Minerals and GNS Science were continuing with data acquisition over several basins - the latest of which was the promising Raukumara Basin, north of the East Cape, which would likely be opened up to companies later this year.

But the Minister's comments weren't all positive. He chided delegates, as he did two years ago, about the level of litigation in the New Zealand industry.

"Unfortunately, the situation does not seem to have improved and frankly, it's not a good look," Duynhoven said.

Litigation was expensive and not the best use of exploration capital, which should be spent on increasing knowledge and delivering company growth and energy security.

He said the government would rather see an industry that fostered alliances and developed relationships constructively.

"I appeal to you to test all other available avenues as alternatives to litigation," Duynhoven said.