Taranaki Oil Production Station
03/02/2012
NZ to be Net Exporter by 2030
In a briefing paper to new Energy and Resources Minister Phil Heatley, the MED says the country could produce more petroleum than it consumes if it meets various growth scenarios.
“Developing our oil, gas (and coal) resources for both domestic consumption and for export will remain a key opportunity” says the MED.
It quotes the Paris-based International Energy Agency as forecasting world demand for fossil fuels will continue to grow, with prices likely to continue to increase as existing fields are depleted and new fields are developed in more difficult-to-access areas.
“The core of our strategy is attracting new players into the market and developing new producing basins.”
The department says New Zealand has already had some recent success in attracting “new capable and experienced operators” and then lists US major Anadarko, now active in the offshore Canterbury and Deepwater Taranaki Basins, Brazilian giant company Petrobras, active in the Raukumara Basin, and US major Apache on the East Coast.
Existing operators, such as Austrian company OMV and Royal Dutch Shell, are also expanding into other frontier regions such as the Great South Basin.
An independent report commissioned by the ministry suggests the government’s royalty take from oil and gas fields already in production has a net present value of $NZ3.2 billion ($A2.5 billion).
“With future discoveries and an increase in the rate of production, this could rise to up to $NZ12.7 billion NPV.”
However, the MED predicts declining oil and gas production for the next few years, primarily because no new offshore oil fields will come onstream.
Production from the offshore Taranaki Tui oil field is now well in decline and production from the more southern Maari field may peak and start to decline. And any significant new developments will have a significant lead time before they are brought onstream.
The MED also says an important measure of progress is the number of exploration, appraisal and development wells drilled each year and this has been “steadily increasing” in recent years.
From a low of only 16 wells drilled during 2003 – the year the Netherland Sewell and Associates International Maui redetermination concluded the offshore Taranaki gas field might be all but extinguished by 2007 – increasing exploration and subsequent development activity has meant steadily improving drilling statistics. A total of 45 wells were drilled during 2010.
The MED also says that to attract investors it is important to ensure that regulatory and other settings are “world class” and that New Zealand is seen as a stable and pro-investment environment.
The department also notes New Zealand’s overall attractiveness as an international oil and gas exploration destination continues to improve, with Canada’s Fraser Institute last year ranking it the 16th best jurisdiction and 5th best country behind the US, the Netherlands, Hungary and Canada.
However, the MED also forecasts that New Zealand will only become a net exporter of petroleum products if levels of exploration continue to increase, with particular emphasis on frontier regions outside of the Taranaki Basin, and continued successes.
Story courtesy of Petroleum News.net