Oil explorers queue up in latest tender round

By CHRIS DANIELS

Gas and petroleum explorers are queuing up to start looking for black gold in New Zealand, says the Government.

A bidding round for new exploration blocks has just closed, with Associate Energy Minister Paul Swain reporting that 41 bids had been received for the 26 exploration blocks offered.

He said 21 companies were involved in the applications.

In making their bids for the right to explore for oil and gas, companies promise to undertake exploration programmes.

If they do not do the work promised within the allotted time, they are forced to relinquish the permit.

The bidding round includes 20 blocks of land in Taranaki, covering 1528sq km and six offshore blocks, which cover 6700 square kilometres.

The offshore blocks are on the continental shelf off the Taranaki coast, near the Maui and Pohokura gas fields.

Confirmation of healthy interest in this latest tender round will come as welcome news to New Zealand's thermal electricity generators.

Contact Energy announced last week that it had shelved its plans to build a new gas-fired power station at Otahuhu, because it could not be assured of enough cheap natural gas.

The massive Maui gas field, which has supplied New Zealand with some of the cheapest gas in the world for the past 20 years, will run out in around 2007. Though there will be plenty of gas to supply households for many decades, the vast amounts needed by the power companies to generate electricity are less assured.

New gas fields are likely to be smaller and more difficult to extract gas from.