Engineer

REGIONAL OVERVIEW
Australia | New Zealand
Undeveloped
Down Under
Australia and New Zealand
hold vast petroleum potential,
much of which remains
undeveloped. Audrey Raj
sets out the detail.
Samples of oil from various New Zealand discoveries. Photo from TAG Oil.
While the Australian oil and gas sector was all about
the development of existing gas resources in 2015,
New Zealand wrapped up the year awarding
nine exploration and production (E&P) licenses in its prolific
Taranaki basin, comprising of six offshore and three onshore
permits.
In its latest bidding round, OMV New Zealand was awarded
four offshore permits and both Todd Exploration and Mont
D’Or Resources bagged one offshore license each.
According to New Zealand’s Energy and Resources Minister
Simon Bridges, collectively the permits include a committed
work program expenditure of about US$2.9 million (NZ$4.4
million), with the potential of more than $238 million (NZ$364
million) if all contingent work is realized.
“The result shows that the block offer approach is successfully
attracting investment in New Zealand even in the face of
low commodity prices, which are putting pressure on exploration
companies to reduce expenditure,” Bridges says.
“Over the past three years, the block offer process has successfully
increased petroleum exploration investment. Block
offer 2015 consolidates these gains and confirms what the
industry already knows - that the potential for Taranaki is far
from reached.”
Separately, New Zealand also closed its 2016 block offer
consultation in October last year, which includes one onshore
and four offshore areas in the Taranaki, Pegasus and East
Coast, Northland-Reinga and Great South and Canterbury
basins. The block offer will be announced this March.
In 2015, Australia, too, offered 29 offshore blocks across eight
basins for competitive bidding by prospective explorers, as part
of it its annual Offshore Petroleum Exploration Acreage Release.
Located in the Northern Territory, the Territory of Ashmore
and Cartier Islands, Western Australia, South Australia, Victoria
and Tasmania, basins such as Bonaparte, Browse, Roebuck,
Carnarvon, Ceduna, Otway, Sorell and Gippsland made the list.
Out of the 29, 23 areas were made available for work program
bidding and six areas for cash bidding. While round one
of work program bidding closed last year, tendering for cash
bidding closes in February 2016, followed by the second work
program bidding due in April this year.
The provisional areas for the 2016 Offshore Exploration
Petroleum Acreage Release will be available early 2016 and
the final areas will be announced in June at the Australian
Petroleum Production and Exploration Association (APPEA)
Conference in Brisbane.
Liquefied natural gas (LNG) has also been a hot topic for
Australia, with the ramp up in LNG production. According to
APPEA, record investment in LNG development is helping to
sustain Australia’s economic growth, and natural gas output
will be more than double in the next five years.
Furthermore, over the same period, LNG exports are expected
to increase from 26 MTPA to more than 76 MTPA. The
Australian oil and gas industry remains a major contributor to
its economy, perhaps even accounting for one-third of Australian
business investment.
Similarly, New Zealand’s oil and gas sector is also a significant
contributor to its own economy. The government receives
approximately 42% of the operating profit of a development,
through a combination of royalties, levies and taxes, according
to the New Zealand Petroleum and Minerals.
Explorers in Australia, New Zealand
AWE Ltd., Bass Strait Oil, Quadrant Energy, Beach Petroleum,
BHP Billiton, Chevron, Cue Energy, ExxonMobil, INPEX,
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58 February 2016 | OE
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