Positive result for oil and gas off the coast of Taranaki as OMV's exploration campaign ends
Tuesday, 14 April 2020
While its testing phase has been curtailed due to coronavirus, oil and gas company OMV says results from its final exploration well in the Taranaki Basin are positive.
OMV started drilling at the Toutouwai-1 site, about 50 kilometres off the Taranaki coast and in 130m of water, in March and successfully reached the reservoir in early April.
OMV's senior vice president, Australasia Gabriel Selischi said results showed that several hydrocarbon charged layers had been encountered during drilling, which went as deep as 4317m and was carried out using the COSL Prospector semi-submersible drilling rig.
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In an emailed statement, Selischi said the discovery had the potential to be a significant result for the company, and New Zealand.
'If future appraisal activities confirm the initial drilling results, this could prove to be an exciting outcome for our country's future energy supply.
'There has not been a major energy find in New Zealand for over a decade and we know that new domestic energy supply is critical to ongoing security of supply, affordability, and ensuring a smooth transition to a renewable future.'
However, due to Covid-19 and the current Alert level four lockdown further testing at the site has been curtailed for now. Selischi said this also meant OMV's drilling campaign had come to an end and no further wells would be drilled.
Toutouwai-1 is now being safely plugged and abandoned and the COSL Prospector will then depart Taranaki waters in mid-late April, Selischi said.
OMV and its joint venture partners, Mitsui E&P Australia and SapuraOMV, will now carry out additional work required to determine commercial viability, he said.
In an emailed statement Jonathan Young, MP for New Plymouth and National's Energy and Resources spokesman, said he welcomed the news OMV had made a discovery in the exploration off the Taranaki Coast.
'This will be good for businesses in Taranaki, be that engineering, offshore marine services or cafes and restaurants. It couldn't have come at a better time when Taranaki needs a boost.'
It was also good news for New Zealand's long term energy supply, he said.
'We are already in a state of constrained supply of natural gas, and as New Zealand goes into years of economic recovery, the last thing we need is energy shortages and price rises.
Natural gas will still remain an important part of New Zealand's energy mix for decades to come, as the country slowly transitions to a low carbon future.'
In an emailed statement, Petroleum Exploration and Production Association of New Zealand (Pepanz) chief executive John Carnegie said the discovery had come at a crucial time.
'This is good news at a time when New Zealand's economy really needs it.
'There is still plenty of work to be done before any development is confirmed, but the potential benefits to Taranaki and all New Zealand are substantial.'
He said any new development would likely mean new jobs and export earnings, while 42 per cent of profits from a new well goes to taxpayers in taxes and royalties.
'It could also help our long-term energy security given we have less than 11 years of natural gas reserves left. We need affordable and reliable energy to rebuild our economy and power our export industries.'
Carnegie said there hadn't been a commercial discovery since 2006, and without the development of the country's own energy, we are 'at the mercy' of overseas producers.
Pepanz think it's much better to produce our own energy in New Zealand instead and the energy provided by natural gas and oil had an important role to play as the world transitions into lower emissions, he said.
Jonathan Young, MP for New Plymouth and National’s Energy and Resources spokesman welcomes the news that OMV have made a discovery in the exploration off the Taranaki Coast.
'This will be good for businesses in Taranaki, be that engineering, offshore marine services or cafes and restaurants. It couldn’t have come at a better time when Taranaki needs a boost.
'This is also good news for New Zealand’s energy supply in the long term. We are already in a state of constrained supply of natural gas, and as New Zealand goes into years of economic recovery, the last thing we need is energy shortages and price rises.
'Natural gas will still remain an important part of New Zealand’s energy mix for decades to come, as the country slowly transitions to a low carbon future.'