Shell New Zealand to drill in Great South Basin

Jan. 7, 2014 at 12:01 PM
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WELLINGTON, New Zealand, Jan. 7 (UPI) -- Shell New Zealand says it will drill an exploration well in the Great South Basin.

OMV New Zealand Ltd and Mitsui E&P Australia Pty Limited are Shell's joint-venture partners in the 13,514-square mile PEP 50119 block off the coast of New Zealand's South Island. Shell became the operator for the permit in April 2012.

Shell said Tuesday the timetable for drilling would be determined after carrying out a detailed study on the site, but that it was targeting early summer 2016.

"We are very grateful to the communities of Otago and Southland for the way in which they have engaged with us so far," said Rob Jager, Country Chairman for Shell New Zealand, in a statement Tuesday.

"We will ensure that open and honest engagement with all interested parties continues as the project matures towards the drilling campaign," Jager said.

"Unlocking the petroleum potential in the Great South Basin could provide real benefits to not only local communities, but to our country as a whole," David Robinson, chief executive of the Petroleum Exploration and Production Association New Zealand said in a news release Tuesday published in Rigzone.

"We just need to look towards the impact the oil and gas industry has had on Taranaki to know that the economic benefits of growing the industry are significant," Robinson said, noting that expansion of the sector in Taranaki has seen the local economy grow by 46.9 percent over four years.

Shell is the majority owner and operator of New Zealand's major natural gas fields in Taranaki, which it says meets around 70 percent of the country's natural gas requirements.

But oil and gas exploration in New Zealand has faced increasing pressure from environmental activists.

Greenpeace has protested deep water exploration by American explorer Anadarko off the Taranaki coast.

In April, environmental protesters disrupted a community meeting in Dunedin to discuss Shell's potential plans for drilling in the Great South Basin. The western edge of Shell's permit area is about 62 miles off Dunedin, the principal city of the Otago region.

Following that incident, Shell's Jager maintained that Shell had been safely operating offshore for more than 30 years in the challenging conditions off the coast of Taranaki "and through being part of the Shell Group can tap into extensive global deepwater drilling experience, technology and expertise."

But New Zealand's Greens party argues that deep sea drilling is too risky.

"We saw one of the world's largest oil companies Exxon Mobil pull out (of the Great South Basin) in 2010 because they said the conditions were too harsh and the location remote," the party's oceans spokesman Gareth Hughes was quoted as saying by the New Zealand Herald Tuesday. "Those conditions still exist for Shell."

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