OIL EXPLORATION IN NEW ZEALAND—PAST AND FUTURE TRENDS

Abstract

The earliest lease for oil prospecting was granted in 1865, and the first bore went down in 1866. Since then and up to 1936, 130 wells were drilled mainly in Taranaki, the East Coast of the North Island and the West Coast of the South Island. No commercial field was discovered, but some oil and gas was found sporadically — sometimes enough for local small-scale consumption — which kept interests alive.

The Petroleum Act in 1937 vested all petroleum prospecting and mining rights in the Crown; with minor modification, it has regulated exploration to the present day. The war-time years saw renewed activity by several major companies; the first seismic surveys were undertaken, and some 20 holes were drilled. But except intermittent, small production from the Moturoa field in New Plymouth (the she of the first well of 1866), no further success was achieved and exploration ceased after 1944. The present period of activity started in 1955. On land the Kapuni gas-condensate field was discovered in 1959, and offshore the much larger Maui field in 1969. Both are in the Taranaki Basin which, having the best prospects in the country, has also received far more attention than other areas.

Land operations sharply decreased after 1965 when Shell and BP, the only majors with on-land interests, began concentrating on new offshore holdings while still retaining their original big land concessions. Amongst the increasing number of independents continued regrouping of interests, farm deals, etc., have become common, and these companies account for nearly all activity on land during more recent years. Practically all drilling after 1965, which from a 5,686 ft. low in 1966 increased to 28,741 ft. in 1969 and 16,952 ft. in 1970 (the smaller 1970 figure is mainly due to rig shortage), was done by companies other than Shell-BP, many of them newcomers. Since to these the more promising prospects have been unavailable, exploration has noticeably shifted to areas of lesser and even marginal prospects.

Concessions have for a number of years covered all lands of even remotest possibilities; the total area leased is around 50,000 sq. miles.

Offshore the first concessions were granted in 1965; in 1970 they covered 384,547 sq. miles. Extensive geophysical surveys followed nearly immediately, and the first well was spudded by Esso in October, 1968. The second well, by Shell in March, 1969, discovered the large Maui field, later confirmed by two step-outs. Up to November 1970, 10 offshore wells with an aggregate footage of 101,181 ft. were drilled.

I he only offshore rig now has left but additional targets are already established, and more will undoubtedly be after seismic surveys presently in course. Offshore drilling is expected to resume as soon as possible, particularly in concessions soon to expire. In large areas only recently granted, however, excessive water depth of up to 1000 m will prevent drilling for probably many years.

On land, the tendency for wider participation in joint ventures is likely to continue. Increased activity by small operators is expected, as domestic rig availability has improved and many concessions are nearing expiry date. New licences to be granted over Greymouth and Canterbury areas which have drawn many competing applications should further stimulate the picture. Since Shell-BP in 1970 finally farmed out their large block in Taranaki which still holds the best prospects and many unexplored features, new operations are expected also there before expiry in 1973; BP-Shell's East Coast holdings expire in 1972 and the future of these two blocks which since 1955 have been in the hands of the same consortium, will probably be most important to further developments in New Zealand.