Shell postpones summer drilling in Great South Basin
By Pattrick Smellie
Sept. 30 (BusinessDesk) - Global oil company Shell's New Zealand arm has postponed plans to drill an exploration well over the summer in the lightly explored Great South Basin, south of the South Island, where oil companies have looked for deep sea oil and natural gas sporadically since the 1960s.
A joint venture involving Shell, Austrian oil and gas company OMV and Japan's Mitsui won the right to drill an exploratory well in Petroleum Exploration Permit 54863, in the Great South Basin in the 2012 government block offer for oil and gas exploration territory.
The joint venture was working with New Zealand Petroleum and Minerals, a division of the Ministry of Business, Innovation and Employment, on a revised work programme for PEP 50119," Shell said in a statement to BusinessDesk. "It is seeking more time to drill an exploration well so further geological interpretation can be undertaken in this under-explored frontier basin. This means a well will not be drilled in the summer of 2016 as previously planned."
Globally, budgets for oil exploration have been slashed in the past two years following a sustained fall in the price of crude oil.
"A revised permit has been granted for PEP 54863 which allows more time to evaluate the complex geology of the basin," said Shell. "Sub-surface analysis will take place before a final decision is made on whether to commit to 3D seismic by July 2017.
The GSB is regarded as most likely the source of a large natural gas find, rather than oil, making it even less attractive as an exploration target as there is a glut of global gas supplies and diminishing demand in the New Zealand economy for natural gas as an industrial fuel.