Oil-drilling returns two years away

By Libby Middlebrook


It will be at least two years before New Zealand Oil and Gas shareholders see any monetary benefits from the latest oil-drilling programme.

NZOG will start a four-week drilling programme at its offshore Taranaki-based Hochstetter prospect about February 10, followed by two months of further seismic testing and site evaluation.

A drilling rig is being towed from Australia. Exploration manager Eric Mathews said the company, which shares the PEP38460 exploration licence with Australia's Pan Pacific and Australian Worldwide Exploration, would decide by May whether to develop the site commercially.

It would then spend 20 months putting together development programmes and arranging finance for a project that could cost $200 million to $1 billion.

NZOG, which has already spent about $5 million investigating the West Maui permit, hopes the prospect holds more than 1 billion barrels of oil.

The company, which is holding meetings around the country this week to brief shareholders, has identified three other prospects in the licence area.