KEY POINTS:
New Zealand-owned Greymouth Petroleum is joining the hunt for oil and gas in the Great South Basin.
Associate Energy Minister Harry Duynhoven said yesterday that Greymouth Petroleum had committed to a $23 million programme in a permit area covering a near-shore and on-shore area of Southland.
Greymouth Petroleum chief operating officer John Sturgess said the company considered the gas and oil potential of the area to be significant.
"Greymouth's objective is to be the first company to deliver cheap fuel to backbone energy users in the South Island," he said.
The company had operated a market in the North Island for spot gas since October. It expected the market for spot, excess and shortfall gas would develop further in the next 12 months.
The news comes a fortnight after the announcement that two consortiums had been awarded permits for other parts of the basin and were planning to spend about $1.2 billion on exploration.
ExxonMobil of the United States leads one consortium, which includes New Zealand company Todd Exploration.
The other is led by OMV, of Austria, and includes PTTEP Offshore Investment of Thailand, and Mitsui Exploration of Japan.
Areas granted to the OMV-led group are immediately to the east and south of that granted to Greymouth Petroleum.
Duynhoven said Greymouth Petroleum's exploration activities would provide a better understanding of the geology and prospectivity of an area in which there had been little activity.
Greymouth Petroleum's area is on the northern margin of the Great South Basin and covers 15,740sq km, of which 7700sq km is offshore.
The private company's permit area covers Winton, Gore, Invercargill, the Catlins and a small portion of Stewart Island, including an area of reported oil seeps in Halfmoon Bay.
- NZPA
