Exploration and Production in New Zealand

The acreage involved in the Great South Basin bid round is located in exceptionally hostile waters. High waves and strong winds are experienced off the South Island, which result in considerable downtime and higher costs, compared with exploration programmes conducted in more favorable conditions. The opening of the bid round after a period of twenty years of no activity is a direct result of the industry having little option but to advance into deeper, harsher conditions.

Currently, the big producer in New Zealand is the Maui gas and oil field. However, this field has now been producing for some years and it is expected to be abandoned in the near future. The gas market will be boosted by the 750 Bcf Pohokura field, New Zealand's largest undeveloped gas field further north off Taranaki, which is expected to come onstream before the end of 2006. Currently, natural gas from the Maui field is being used for the early part of commissioning but gas from the Pohokura production wells drilled from the shore will soon be used. Other field developments are progressing well. The Tui area oil fields, the Maari oil/gas field, and the Kupe gas/oil field, among others, are hoped to partially compensate for the dwindling Maui field and are all due to come on-stream before 2009.

Despite the low production of hydrocarbons in New Zealand, activity in the exploration sector is high at present. Since 2004, discoveries have been made both onshore and offshore in the Taranaki Basin. In addition, there has been a large amount of seismic acquisition not just within the Taranaki Basin, but also in more under explored basins which has provided data to suggest the potential for various leads and prospects throughout the country. Several further seismic projects are planned for the fourth quarter 2006.