New Zealand Awards 15 Oil Permits Including Three To Chevron Joint Venture

   By Rebecca Howard 
 

WELLINGTON, New Zealand--The New Zealand government Tuesday awarded 15 oil exploration permits, including three to a joint venture led by Chevron New Zealand Exploration Ltd, in the oil giant's first foray into upstream in New Zealand.

In total, six onshore and nine offshore permits were awarded to nine companies, up from the 10 permits awarded last year. Other new entrants to New Zealand include India's ONGC Videsh Ltd and New Zealand's New Endeavour Resources.

Oil is currently New Zealand's fourth-largest commodity export after dairy, meat and wood. Oil and gas combined contribute more than NZ$2.7 billion (US$2.5 billion) to gross domestic product each year.

Chevron NZ, a unit of Chevron Corp. (CVX), will partner with Statoil Lambda Netherlands BV in the Pegasus Basin off the east coast of New Zealand's North Island.

"This is exploration in a frontier basin," said Liz Schwarze, general manager for exploration with Chevron Asia Pacific Exploration and Production, on the sidelines of the event to award the permits. The water depths in the basin range from 2,600 feet to 9,800 feet. The three permits cover more than 6.26 million acres.

Statoil Lambda Netherlands BV was also awarded another block off the top of the North Island, adjacent to a permit it already holds.

Ms. Schwarze said Chevron's initial commitment is for geological studies, including 2D and 3D seismic data acquisition over a four to five-year period.

"The earliest we would drill a well would be 2021," she said. The initial investment, not including drilling, is for around NZ$77 million.

She said key to bringing Chevron to New Zealand was the availability of multi-client seismic data for purchase, which made it easier to assess the potential.

She declined to comment on current oil prices, saying "exploration is a long-cycle activity ... but the world will continue to need energy."

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