KEY POINTS:
Associate Energy Minister Harry Duynhoven is more upbeat about burying polluting carbon dioxide than his ministerial colleague David Parker.
Speaking after addressing the Petroleum Conference in Auckland, Duynhoven said carbon was now being stored around the world.
"There were people working very hard on the technology. The Americans believe it is imminent; the Germans and the Austrians are getting on with it. I think it's here."
A fortnight ago Energy Minister David Parker had a testy exchange with Solid Energy chief executive Don Elder over the state of the storage technology, which could allow widescale exploitation of low quality coal for liquid fuels in transport.
Parker, who will speak at the conference today, said then there was a degree of wishful thinking and exaggeration about how close clean-coal technology really was.
Duynhoven said the main impediment was cost.
"Already there's a power station in Europe that is disposing of its CO2 down a disused mine.
"The costs may be high, and that's the stumbling block, but certainly they're doing it."
In his speech to the conference, Duynhoven said the Tui, Maari, Kupe, and Pohokura projects would reach peak production by about 2010 and bring 140 million barrels of new oil reserves into the market.
"New Zealand's total oil production will then be at a record level not seen since the heady days of Maui."
It had taken less than three years from Tui's discovery to undertake appraisal, carry out detailed technical and commercial analysis, and finally to design and build facilities to extract and process the oil.
"Quite remarkable, and surely a feat that highlights that petroleum discovered in New Zealand can be commercialised in a very short period of time."
Duynhoven said the Great South Basin was one of "the world's hot spots" for petroleum exploration, and $1.2 billion was proposed to be spent on exploration in the southern oceans off Southland over the next five years.
Explorers include ExxonMobil, PTT Exploration and Production from Thailand, OMV from Austria, Mitsui Exploration and Production from Japan, and local companies Todd Energy and Greymouth Exploration.
The president of PTT, Maroot Mrigadat, told the conference his company regarded the Great South Basin as a high-risk, high-return venture akin to the North Sea, but in an even more challenging environment.
Duynhoven said tenders would be let later this year for the Raukumara blocks off East Cape.
Crown Minerals had expressed confidence that Raukumara had all the necessary components for hydrocarbon generation, migration and trapping mechanisms.
Preliminary analysis of the recent seismic data acquisition in the basin had significantly strengthened that confidence.
Other block offers that are on the near horizon are offshore Northland, offshore Taranaki, Canterbury and East Coast.
