Increase in oil and gas exploration

While the Government has said they won’t issue any more oil or gas exploration permits and existing permits can still be used. With oil prices increasing there could be an increase in exploration in the short term.

Stuff: Rise in oil and gas exploration activity in Taranaki by early 2019

A flurry of oil and gas exploration is set to be unleashed in Taranaki during the next 18 to 36 months as companies make decisions on whether to ‘drill or drop’ existing permits.

The schedule will see as many as 20 wells being drilled both onshore and offshore in the region before early 2019 as the price of oil steadily rises, to US$80 from below US$40 two years ago.

A Petroleum Exploration and Production Association New Zealand (PEPANZ) spokesman said a decision would be made on a total of 31 exploration permits to be completed in Taranaki, as well as off the east coast of both the North and South Islands over the next three years.

Todd Energy is well underway with preparations to begin drilling and hydraulic fracturing six new wells at the Mangahewa G site, north Taranaki, in late 2018. Contractors are finishing off laying the 4.5 kilometre gas pipeline from the site to the Mangahewa production station in preparation for the wells being drilled and fractured.

The drilling and fracturing phase of the programme could see employment for up to 150 people.

OMV, which recently acquired Shell New Zealand assets, is planning to drill nine offshore exploration wells during the 2019/2020 summer across six permits in the Taranaki Basin.

The permits, granted to the company under the Crown Minerals Act, have a number of time-dependent exploration commitments and if successful further appraisal drilling, the step before production, would be considered, the PEPANZ spokesman said.

It takes a lot of time and money to get from permit to production, but the existing permits may become more valuable if no more are issued.