The Government has been "extraordinarily bullish" in assessing the likelihood of oil companies exploring the Northland Basin, a geologist says.
Crown Minerals, which manages the Government's oil, gas, mineral and coal resources, has extended a tender round for oil exploration bids for the Northland Basin to take advantage of soaring
oil prices.
It says some of the largest oil companies in the world are awaiting details of an exploration tender round which includes the Northland basin, a 120,000sq km block lying mainly off shore.
However, Northland geologist Roger Brand said the enthusiasm of prospective oil companies might be tempered by Crown Mineral's hard-nosed conditions for exploration.
A condition of tender is that the companies gather seismic data and begin drilling operations within three years.
"They're being hard-nosed at the moment. They think they're in the driving seat," he said.
There was only a moderate chance of a major oil company exploring the basin.
While there was potential for oil and gas, little exploration had been done and shallow volcanoes in the basin made it difficult to identify prospects, he said.
Crown Minerals was being extraordinarily confident about the prospect of companies exploring in New Zealand.
"I'm all for it. We're at the end of the world. We have to drum up the story to get anyone coming here," Brand said.
"The amount of finance available in this country is pretty small. No one wants to go out on a limb and put their hard-earned savings into high-risk exploration."
Crown Minerals group manager Adam Feeley agreed there were challenges associated with the Northland basin but did not believe the timeframes attached to the tenders would be a concern.
The companies likely to bid would have sufficient resources to begin drilling within three years.
- NZPA
