NZOG goes deep hoping for big strike

By Libby Middlebrook

An Australian drilling rig will get a fish-eye view of New Zealand next month when it explores a potential oil reserve off the Taranaki coast in a US$6 million project.

New Zealand Oil & Gas is leasing an 8000-tonne semi-submersible rig from Ocean Epoch in Australia to start drilling a 3600m well at the offshore Hochstetter prospect on February 13.

It will be the company's first well in New Zealand waters for almost 10 years, with millions of barrels of oil thought to lie beneath the sea floor.

"We think the area could be as big as Victoria's Bass Strait, and that holds about four billion barrels," said Gordon Ward, finance manager at NZOG.

The Hochstetter prospect lies west of the Maui oil and gas field in the company's PEP38460 licence, a relatively underexplored area of the Taranaki Basin.

Spokesman Warren Head said seismic testing had identified several other prospects in the licence area which may be developed after the Hochstetter target.

"It's potentially one of the largest oil discoveries in New Zealand," said Mr Head.

However, a market analyst has questioned the prospects of the PEP38460 licence after it took NZOG more than 18 months to farm out Hochstetter.

NZOG holds a 40 per cent share of the Hochstetter prospect, Australia's Pan Pacific another 40 per cent and Australian Worldwide Exploration, 20 per cent.