By Gavin Evans
July 30 (BusinessDesk) - The COSL Prospector is an ideal rig for drilling in the Great South Basin, an Environmental Protection Authority hearing was told today.
The four-year-old harsh environment rig was designed for working in the North Sea and can operate in wave heights of up to 17 metres, Gerald Hollinger, OMV’s New Zealand well engineering manager told the hearing in Dunedin this morning.
“It’s perfectly designed for what we want to do here,” Hollinger said in reply to questions from Greg Shaw, a member of the three-strong decision-making committee.
The semi-submersible rig is more stable than a drillship and can also cope with waves 20 metres high that have been reported in New Zealand’s southern waters, he said.
In such conditions, the rig would disconnect - if it was drilling - and turn into the waves.
“So it can handle these higher waves as well,” Hollinger said
The panel, comprising Shaw, EPA board member Nicki Crauford and chair Mark Farnsworth, are tasked with deciding whether the risks from accidental chemical spills into the rig’s deck drainage and then into the sea, are an unacceptable risk.
All the expert evidence is that the risks and possible harms are negligible, given the tiny volumes of chemicals that would be involved and their rapid dilution in the high-energy waters off the country’s south-east coast.
Similar consents have previously been granted to OMV and other operators for projects off the Taranaki coast.
Reid Forrest, an associate with environmental consultancy SLR, observed that wave heights and wind speeds in the Great South Basin will generally be higher than in Taranaki, ensuring faster mixing and dilution of any spilled material.
The hydrocarbon potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised. There are proven petroleum systems in the region but drilling has been sporadic since the 1970s and activity dried up after the plunge in oil prices late 2014.
Ten of the 14 wells drilled in the Canterbury-GSB basins have encountered hydrocarbons, with four delivering sub-commercial discoveries.
Vienna-based OMV has previously estimated the potential resource in just the key prospects in the permits held by it, New Zealand Oil & Gas and Beach Energy, at the equivalent of almost 3.7 billion barrels of oil and gas. The two basins cover roughly 160,000 square-kilometres – four-times larger than the producing and geologically related Taranaki basin.
OMV is aiming to drill Tawhaki-1, about 146 kilometres off the coast south-east of Balclutha, this summer.
Henrik Mosser, OMV NZ’s head of exploration, production and development, told the committee a successful well would deliver “substantial” economic benefit to the country, noting that in the past four years alone, the oil and gas sector industry has contributed about $2.8 billion to the economy.
About 20 protestors gathered outside the hotel hosting the hearing today, in a muted complaint at the narrow focus and limited public input in the consent process.
Climate change is a matter the committee is specifically barred from considering under the consent being sought. It also covers only a sliver of the activities OMV will have to seek consent for for its work in the Great South Basin.
That didn’t stop Crauford questioning Mosser on the firm’s attitude to climate change and what it is doing about it.
Mosser acknowledged that the company has no programmes to help its customers reduce emissions from the products it sells.
But he observed that about 70 percent of the firm’s New Zealand production is gas – a lower-emitting fuel in increasing demand globally as a replacement for coal and oil and power generation and industrial use.
He said OMV has maintained an A-minus rating for the past three years under the global CDP emissions reporting scheme, and has also budgeted about $860 million for emission reduction projects within its global operations during the next three years.
OMV’s application for the rest of the Great South Basin programme, which will be considered by the EPA without any public input, is expected to be lodged within the next couple of weeks, said Matiu Park, the firm’s health, safety, security and environmental manager for Australasia.
The Prospector is currently drilling in Taranaki for Tamarind Resources – something that was news to some of the committee.
OMV then plans to use the rig for a number of wells in Taranaki before bringing it south for the Tawhaki drilling. Company executives said the timing of that will depend on when Tamarind completes the side-track drilling programme it has underway at its Tui oil field.