Two Bids Received for Canterbury Offshore Acreage

The Associate Minister of Energy, Hon Harry Duynhoven revealed that the Government of New Zealand has received bids for two of the three offshore Canterbury Basin petroleum exploration blocks in its latest permit tender round, which closed last Friday May 30th.

Bids were received from four explorers, represented by two joint bidding groups. The area covered by these applications equates to approximately 18,000 sq km of the 27,000 sq km of offshore area up for tender.

"I am pleased with the quality of the applications received over the two most prospective blocks offered," Mr. Duynhoven said.

"In the past, the likelihood of finding gas in the basin, coupled with the limited South Island gas infrastructure, low gas price and lack of defined markets has limited the petroleum industry's interest in the Canterbury Basin.

"However, the changing face of the New Zealand energy industry has led the exploration community to reappraise the opportunities the Canterbury Basin has to offer. The existence of a local natural gas liquids market and the potential for gas-fired electricity generation in the South Island provide a real opportunity for the country to develop a second petroleum producing province," Mr. Duynhoven said.

Recommendations on the award of new permits will be made within two months.

No applications were received for the two onshore Canterbury blocks offered, although this was in line with the government's expectations.

Exploration activity in the 1980s led to the discovery of gas and condensate in the Galleon-1 well located offshore south-west of Oamaru. This well flowed gas and condensate on test at a rate of up to 10 million cubic feet per day with 2240 barrels per day of condensate (light oil). Gas and condensate were also recovered during drilling from the Clipper-1 well located further north in the basin.