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Another Oil Giant Pulls Out of East Coast

15 January 2012

Another Oil Giant Pulls Out of East Coast

East Coast residents concerned about the impacts of mining in the region are celebrating news that a Canadian oil giant has withdrawn its support for exploration in New Zealand.

A statement on the website of Canadian company TAG Oil this week announced the withdrawal of exploration partner Apache Corporation from any work beyond the first phase of onshore prospecting in the East Coast Basin. Apache Corporation (Canada) had committed up to $110m in the project but this was subject to a decision to continue after initial exploration.

“Obviously the 2D seismic data Apache collected suggested the resource is marginal at best and given the high level of concern expressed by farmers, horticulturalists, wine growers, Maori land owners and the general public, they have decided it is not worth pursuing” said Gisborne District Councillor Manu Caddie.

Mr Caddie is not sure what this development means for a Resource Consent from Apache to drill an exploratory well near the township of Te Karaka, or how it will impact on a Ministry of Business, Innovation and Employment study that uses Apache production scenarios to quantify economic benefits of petroleum production in the region.

“The MBIE study was promised before Christmas and still hasn’t been released. I hope now they will go back to the drawing board and spend another $100,000 on a study looking at realistic and sustainable economic development options for the region. Developing energy from forestry and seaweed biomass, solar power stations and offshore wind should all be getting serious research funding to benefit the East Coast and the whole country.”

“Following hard on the heels of the Petrobras withdrawal, I’m sure there will be many people happy to see Government plans for exploration here and indeed the basis of their whole energy strategy and economic plan are coming undone.”

“It is of concern that TAG are saying they still have longterm plans for the East Coast as their original announcement of the Apache joint venture noted unconventional drilling is high risk and that Apache was bringing experience and expertise that we can only assume TAG doesn’t have.”

Both companies have seen their share prices fall in the days since the announcement of the Apache exit.

The news follows the indictment last week of a TAG employee in New Plymouth accused of industrial espionage by stealing information from the company prior to starting with another Canadian company holding East Coast exploration permits.

LINKS:

• TAG announcement: http://www.tagoil.com/20130111-TAG-Oil-Receives-Notice-From-Apache.asp

• Apache Info Pack: http://nodrilling.files.wordpress.com/2011/10/apache-tag-east-coast-exploration-project-info-pack-1-with-maps.pdf

• TAG employee indictment: http://www.stuff.co.nz/taranaki-daily-news/news/8160600/Oil-manager-accused-of-espionage-gets-bail


ENDS

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