from The Northern Advocate

Go-ahead for onshore oil search

Annette Lambly | 10th September 2009

The stretch of coastline to be explored.

A privately owned New Zealand exploration company is to look for onshore oil and gas around the Kaipara Harbour.

Kea Petroleum has been granted a five-year permit covering an area of 2157sq km of land surrounding the  harbour.

Should a commercially viable discovery be made, it is possible production could be under way within five years.

The permit does not allow any drilling in the harbour itself.

Kea’s chief executive and owner, veteran oilman Dave Bennett,  says gravity and soil gas geochemical testing will begin as early as February.

Dr Bennett said exploration  could take four years.

While an undeveloped gas field existed at Karewa, 60km  offshore from Helensville, Kaipara was largely unexplored but the geology and offshore information made it one of the more promising parts of the Northland Basin, he said.

With the exception of Kaipara, exploration of the basin was virtually impossible because the Northland peninsula  was covered in a  1000-metre deep layer of rock.

Dr Bennett said it was unlikely any crude discovered in the Kaipara would be refined at Marsden Point but would be shipped to Australian refineries.

“New Zealand oil is typically high value, light, sweet crude and Marsden Point is not set up to refine this type of oil.”

However, it was possible gas would be piped using the current infrastructure to the  Auckland electricity market.

Results from the samples obtained from portable probes could lead to more expensive seismic surveying in more promising areas and exploratory drilling could then follow.

Kea has already discussed its plans with iwi groups in the area.

Dr Bennett said  an onshore oil discovery could be in production within a matter of months but gas production took longer.

Any drilling was subject to Resource Management Act procedures and a typical oil well could cost up to $2 million  to complete.

He said a discovery would have many benefits to the area, including employment at all stages of the operation, increased land value and improvements to local infrastructure such as roading.

Dr Bennett was the exploration manager for New Zealand Oil & Gas when the Kupe South field was discovered and he is a former chief executive of Austral-Pacific Energy, which developed the oil-producing Cheal field.

Kea has alliance partners Australian-listed company Rawson Resources and Australian private company Hardie Oceanic.

It has two onshore permit areas in Taranaki, where exploratory drilling  is scheduled to start next year.