Permit given for Hawke's Bay oil exploration

Oil and gas exploration off Hawke's Bay could begin this summer.

Pogo New Zealand has been awarded a permit to explore for oil and gas over more than 8000sq km between Mahia and Cape Kidnappers.

Associate Energy Minister Harry Duynhoven said Pogo's minimum work programme included provision for 1500km of 2D seismic data and up to two exploration wells.

Exploration expenditure over the five-year permit period was estimated at up to $73.27 million.

"It is important for the development of New Zealand's petroleum industry that production happens within its frontier basins," Mr Duynhoven said.

"The proposed exploration programme of work gives justified optimism for the future of the basin."

The executive officer of the Petroleum Exploration Association of New Zealand, Mike Patrick, said a company with a five-year permit would send a seismic vessel to explore. That could happen as soon as this summer.

"In year three the company has to make a decision to drill the holes or surrender the permits," he said.

"Even if they don't discover anything, the seismic vessel will be serviced by the Port of Napier," Dr Patrick said.

"Then if they do drill you will have another offshore drilling rig which will have to be serviced by two boats."

"But the real benefit comes to the region if they discover anything - you've only got to look at Taranaki."

The group manager of Crown Minerals, Adam Feeley, said explorers were "showing a real interest to develop a new producing petroleum basin in New Zealand other than Taranaki.

"In terms of speed for development it (the East Coast) is seen as a good area," Mr Feeley said.

Permits to explore the Great Southern Basin would be offered next, but while this area had potential it would take a long time to develop because it was remote, he said.

Pogo New Zealand has its headquarters in Texas and is a wholly-owned subsidiary of Pogo Producing Company, which has been involved in oil and gas exploration for more than 30 years.

- HAWKE'S BAY TODAY