New Zealand Encouraging Exploration
|Wednesday, March 24, 2004
The Associate Minister of Energy, Hon. Harry Duynhoven announced a substantial blocks offer at the recent New Zealand Petroleum Conference.
There are five blocks on offer within the Offshore Northland Basin covering a total of 34,717 square kilometers. The blocks are large ranging in size from 5,229 sq km to 10,018 sq km.
The blocks on offer have been defined from modern seismic data and the recent evaluation of reprocessed seismic data by Spectrum Energy & Information Services. The Institute of Geological and Nuclear Sciences were also engaged to assist in the evaluation of geological data from well completion reports.
The area has been described as highly prospective for oil and gas with favorable geological conditions and evidence of a previously undiscovered and older (mid Jurassic) petroleum system. Furthermore the Northland Block is interpreted as being a structural extension of the producing Taranaki Basin.
An encouraging discovery in the southern most part of the Northland basin was also announced at the New Zealand Petroleum Conference. The gas discovery by Todd Energy from Karewa–1 has been reported to be between 60 and 150 bcf (P50). This news adds further confidence to the likelihood of further discoveries being made in the Northland Basin.
There is a growing market for gas and oil in New Zealand. Domestic gas production in New Zealand is declining while electricity generators and petrochemical industries are competing to secure future gas contracts.
There are a number of new electricity generation projects currently on hold awaiting new gas discoveries. This increase in demand has resulted in a significant increase in wholesale gas prices, currently these prices are around $5.50 G/J with some industry experts forecasting prices as high as $6.50 G/J before the end of 2004.
Demand for oil is also increasing in response to domestic growth. The local refinery (Marsden Point) located less than 100 km from the Northland Basin receives approximately 25% of the local oil production with the majority exported to neighboring Australia.
As a result of these market conditions there has never been a better time to explore in New Zealand.