New Zealand Awards Two Canterbury Basin Permits

The Associate Minister of Energy, Hon Harry Duynhoven has awarded two new offshore Canterbury Basin petroleum exploration permits as a result of the Government's latest permit tender round.

Two mid-sized Australian explorers Tap (New Zealand) Pty Ltd and AWE New Zealand Pty Ltd have been awarded a 6647 sq km permit (PEP 38 259) in the southern section of the basin off the Otago coast from north of Oamaru to Dunedin.

The 10,950 sq km predominantly offshore northern permit (PEP 38 258), from south of Timaru to south of Christchurch, was awarded to a consortium of Indo-Pacific Energy (NZ) Ltd and Durum Energy (New Zealand) Ltd.

"I am pleased with the quality of the work programs for the two offshore Canterbury Basin permits, " Mr. Duynhoven said.

"The changing New Zealand energy industry with higher gas prices, a local gas liquids market and the potential for gas-fired electricity generation in the South Island, offers a real potential for a second petroleum producing province," Mr. Duynhoven said.

Tap and AWE have proven track records of finding and bringing to development major offshore hydrocarbon fields. Perth-based Tap (New Zealand) holds interests in six onshore Taranaki permits.

Sydney-based AWE New Zealand Pty Ltd, a wholly-owned subsidiary of Australian Worldwide Exploration Ltd holds interests in three Taranaki petroleum permits including the recent offshore Tui oil discovery.

Tap and AWE's work program provides for the reprocessing of 1500 km of existing seismic data, reservoir characterization and geochemical studies with special emphasis on the Galleon South and Barque prospects. A well is planned in the third year.

Indo-Pacific has interests in 10 New Zealand exploration permits, one of these being the adjoining onshore Canterbury permit PEP 38256. The company's operational headquarters are in Wellington. Indo-Pacific and Tap are partners in the recent Kahili onshore Taranaki gas-condensate discovery.

Durum Energy, a subsidiary of Vancouver-based TAG Oil Ltd, is associated with Indo-Pacific in two local exploration permits, one in onshore Canterbury and the other offshore Taranaki.

Indo-Pacific Energy's work program involves the compilation and evaluation of maturation and source rock data, the determination of a hydrocarbon charge model, basin modelling of oil expulsion efficiencies and migration modelling, reprocessing of 250km of seismic data, remapping of stratigraphic and structural traps along the Clipper sub-basin, with possible acquiring of 3D seismic data and a well inside four years.

Exploration activity in the 1980s led to the discovery of gas and condensate in the Galleon-1 well located offshore south-east 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.