Shell is leading a new deepwater exploration project off New Zealand’s south-east coast.
The oil giant and its partners – Austria’s OMV and Japan’s Mitsui – are the latest group of companies on the hunt for natural gas in New Zealand’s deepwater basins.
Interest in the area has grown following years of neglect, as a result of the development of floating liquefied natural gas (LNG) facilities, which allow gas to be processed offshore. Shell has spearheaded the development of this technology.
The firm today announced plans to drill an initial project well in the remote waters of the Great South Basin in 2016.
Shell said it was confident any find would be natural gas rather than oil, with the project likely to become a gas export development due to a limited domestic gas market in New Zealand.
The project follows a programme by US company Anadarko Petroleum to drill two deepwater wildcat wells, in a joint venture with Australia’s Origin Energy.
Anadarko has already started drilling its first well off the west coast of the New Zealand’s North Island.
Prior to these two projects, exploration in the area has been largely neglected.
In the 1980s, US exploration firm Hunt Petroleum put the brakes on exploration in the Great South Basin as a result of harsh conditions and political red tape.
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