Higher oil prices will spark interest in Northland exploration

Soaring oil prices are expected to boost interest in vast untapped oil and gas reserves thought to lie below Northland.

The Northland basin, a 120,000sq km block lying mainly off shore, was opened up for prospecting last year.

All elements necessary for large drilling targets have been found in the area.

Crown Minerals group manager Adam Feeley said some of the largest oil companies in the world were waiting for details of the exploration tender round, which also includes blocks off Taranaki.

"We've had discussions ranging from mid-size companies through to super- majors," Mr Feeley said.

"We've had some pretty interesting discussions with very large companies that are seriously looking at New Zealand.

"There are a couple of blocks that we are very confident that we will get away. Some look more promising than others."

A public tender for oil exploration bids for the Northland basin was to expire in December but that was extended by a year to take advantage of the availability of seismic data on the sites.

The Government is providing the data to companies in a bid to fire interest in the blocks.

There was no significant interest in the Northland basin last year, but that was partly because there was little data on the site and the data available was costly, Mr Feeley said. High fuel prices could also help attract interest from oil companies, which are enjoying increased profits.

"The companies that are smart are realising they have to put the profits to use."

New Zealand was seen as an attractive option because of the scale of the blocks on offer.

"Oil companies live and die not only by their profits but also their reserves," Mr Feeley said.

Bidders did not have to pay for the blocks but would have to pay the exploration costs.

"It's not about making money off the exploration programmes. It's about getting aggressive quick exploration and improving the long term prospects of New Zealand's energy supply."

If an oil company did begin exploration in Northland, it would have only modest short-term economic benefits - but if oil reserves were found, it would have significant impact on employment and investment in the region.

- NORTHERN ADVOCATE (WHANGAREI)