Statoil Pulls Out of New Zealand Venture

New Zealand
Pencarrow Head, Wellington, New Zealand.

By MarEx 2016-10-14 20:43:43

Statoil has informed the New Zealand Government of its decision to stop looking for oil and gas in the Reinga Basin about 85 kilometers off the West Coast of Northland.

The company was awarded two exploration permits in the area in 2013 and 2014. 

“After studying 2D seismic data of the search area for the past three years, we think the chance of making a large oil or gas discovery is small, so we have decided to conclude our exploration work in Northland and return those exploration permits to the Crown,” said Statoil New Zealand Country Manager Brynjulv Kløve.

When put up for tender, the area was described by government agency, GNS Sciences, as one of the most prospective frontier basins in New Zealand.

Statoil said that opposition from some iwi and environmental groups had not played a part in its decision to surrender the permit. “Some may speculate we are surrendering the permits for various reasons, but the only reason is that we see the probability too low to justify continuing our search,” said Kløve. 

Environmental groups were concerned about the risk of oil spills in water up to 2,000 meters deep and the impact on the environment of burning fossil fuels.

Statoil will keep its 50 percent interest in an area off the southern east coast of the North Island, and seismic work could begin this summer.

“Our focus will now shift to our four exploration permits off the South East Coast of the North Island, and to exploration projects elsewhere in the world.”

Petrobras pulled out of exploration in the Raukumara Basin off the East Coast in 2012, and Anadarko abandoned development off Taranaki following a $300 million drilling campaign in 2014.