Interest in offshore Northland, pass on Taranaki

Energy exploration permits have been awarded by the Government for offshore Northland but there were no takers for deepwater Taranaki prospecting.

Three permits have gone to a joint-venture company set up by Australian energy company Origin - 50 per cent owner of Contact Energy - and European oil giant OMV. OMV has a 26 per cent stake in the Pohokura gas field and 69 per cent of the Maari oil field, both in offshore Taranaki and due to come into production over the next few years.

These two companies have promised to initially spend $15 million exploring off the Northland coast, with another $120 million possible later in the programme.

With local supplies of gas desperately needed for new power stations, the Government will be disappointed that no one is interested in exploring the offshore Taranaki basin - an untested and expensive environment.

Three blocks in the Outer Taranaki Basin, covering more than 33,000 sq km, were to be allocated to explorers in what was supposed to be a competitive round of "work programme bidding".

In this process, companies promise to do certain work such as seismic surveying and drilling. The one that promises to do the most wins the permit - so long as Crown Minerals is convinced the company has the necessary financial backing and industry experience to back it up with action.

Promoting the outer Taranaki Basin has been a big job for Crown Minerals, which has helped fund seismic surveys of the area.

Soaring world oil and gas prices have not been enough to get exploration companies to head out into the deep waters of the Taranaki basin.

The unallocated blocks will be re-offered for a short period.