MARTA STEEMAN

The hoped-for economic bonanza from oil and gas exploration in the “frontier” region of the Great South Basin looks a long way off as a major international oil consortium weighs up costly seismic data months after a rival pulled out.

Now four years into a detailed programme of research, shooting and interpreting seismic data, the international joint venture led by Austrian oil major OMV is still in the hunt but looking for more time to make crucial decisions on whether to continue.

The joint venture holds three 5-year exploration permits in the Great South Basin, a huge offshore area of 130,000 square kilometres south and east of Invercargill.

The permits require the OMV joint venture to choose by the end of this week whether to shoot 3D seismic data or drill a well, and carry out the decision in the next 12 months.

Effectively the choice is to commit more funds to costly 3D seismic data or quit. Drilling a well is not an option at present.

Yesterday the joint venture announced it had asked the Economic Development Ministry to grant it two more months.

The partners are OMV, with 36 per cent, Thailand’s PTTEP NZ with 36 per cent and Japanese giant Mitsui E & P Australia with 28 per cent.

Eight months ago oil giant ExxonMobil and its New Zealand partner Todd threw in the towel after finding the area too high-risk.

New Zealand Petroleum and Minerals, within the Economic Development Ministry, confirmed yesterday that OMV submitted a request on July 1 for a two-month deferral on its commitment date related to its three petroleum exploration permits in the Great South Basin.

The request would be considered thoroughly and the decision would be announced when that was completed.

OMV New Zealand managing director Peter Zeilinger said drilling a well was “realistically” three years away.

That depended on whether it committed to shooting 3D seismic data and what it found.

The ministry agreed in March to changes to the permits which allowed the OMV joint venture to decide between the 3D seismic and drilling a well.

In the original conditions agreed in mid-2007, the choice was to drill a well or surrender the permit.

The Great South Basin is frontier territory where only seven wells have been drilled in the main basin and one on the northern edge, in the 1970s and 1980s.

“I am pretty hopeful we will commit to the next step [3D],” Mr Zeilinger said.

– BusinessDay.co.nz