New Zealand Awards 15 Permits To Different Companies For Onshore And Offshore Oil Exploration

By @diplomatist10 on
An oil field is seen at sunrise near Bakersfield, California October 14, 2014. Brent crude hit a new four-year low on Wednesday before recovering to just under $85 a barrel, as faltering global growth curbed demand for fuel at a time of heavy oversupply.
An oil field is seen at sunrise near Bakersfield, California October 14, 2014. Brent crude hit a new four-year low on Wednesday before recovering to just under $85 a barrel, as faltering global growth curbed demand for fuel at a time of heavy oversupply. Oil saw its biggest daily fall in more than three years on Tuesday after the West's energy watchdog slashed its forecasts for world oil demand for this year and 2015. Picture taken October 14, 2014. Reuters/Stringer

In a move to augment energy exports in the coming decade, the New Zealand government has awarded 15 oil exploration permits in both onshore and offshore ventures. It marked a substantial rise in the number of permits issued compared to 2013.  From 10 permits in 2013, it has gone up to 15 permits now. 

Oil is New Zealand's fourth-largest export commodity, after dairy, meat and wood. It contributes more than US$2.5 billion to New Zealand's GDP, reported Nasdaq News. The six onshore permits cover Taranaki, West Coast, and East Coast basins, while the nine offshore permits have Taranaki, East Coast, Reinga-Northland, and Pegasus basins in their purview. These are part of the country's Block Offer 2014. The permits represent more than $110 million in committed expenditure on initial exploration.

Block Offer

Once that is successful, further work worth more than $1 billion will be awarded. "Block Offer 2014 has attracted three new companies including local and international companies already operating in New Zealand," said Simon Bridges, New Zealand's minister of energy and resources, added a report from Oil and Gas Journal.

Among the new entrants are Chevron Corp, which formed a joint venture with Norway's Statoil and India's ONGC Videsh Ltd.  As a domestic company, New Zealand's New Endeavour Resources is also new. Chevron has stated that it will operate the blocks with 50 percent interest, while Statoil will hold the remaining 50 percent. "This award adds to Chevron's range of potential long-term options in the Asia-Pacific region," said Melody Meyer, president of Chevron Asia Pacific. Chevron is credited with the experience of having operated in the downstream sector of New Zealand for more than 90 years. India's ONGC Videsh will take the 2121-sq-km PEP 57090 in the Taranaki basin. 

Oil Spill Charges

Among the companies chosen for oil exploration, Chevron is reportedly facing criminal charges in Brazil for an oil spill case, said a TV NZ report. In the new contract, Chevron has been awarded off the coast of Wellington. Chevron was held responsible for the oil spill involving 3500 barrels into Brazil waters in 2011. In a mark of protest against such faulty selection of companies, members of Oil Free Wellington chained themselves to the gates of the NZ Petroleum and Minerals headquarters in Wellington.  A Chevron spokesperson said they have learned a lesson from the Brazil incident and there will not be a repeat of it in New Zealand. Energy Minister Simon Bridges also played down Chevron issue and said "its record may not be perfect but it is strong".

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