Australian Explorers Gain Oil Permits in N.Z.'s Taranaki Region

By Gavin Evans

Sept. 23 (Bloomberg) -- Four Australian oil companies bought stakes in onshore exploration permits offered by New Zealand's government in the Taranaki region.

Rawson Resources NL and Hardie Holdings Ltd., both based in Sydney, will explore two permits east of the McKee and TAWN fields with local partners, the New Zealand government's Crown Minerals unit said today. Mosaic Oil NL and GB Energy Ltd. gained stakes in two permits near Origin Energy Ltd.'s Kauri and Rimu fields on the south coast.

Taranaki is New Zealand's biggest oil and gas producing basin. While its fields are close to pipelines and treatment plants, the region is known for fractured geology and tight reservoirs that can make development costly and time-consuming.

``Over 20 wells are proposed to be drilled within the first five years, looking for shallow and deep targets,'' Associate Energy Minister Harry Duynhoven said in a statement. ``Four of these are committed to be drilled within the first 24 months.''

Rawson and Hardie will partner with Wellington-based Kea Petroleum Ltd., Mosaic with Wellington-based L&M Petroleum Ltd., and GB Energy with Christchurch-based Green Gate Ltd.

The remaining acreage was taken up by closely held New Zealand explorers Todd Energy Ltd. and Greymouth Petroleum Ltd.

Greymouth acquired three permits in the central part of the region alongside its Kaimiro and Surrey fields. Todd took one permit between Kaimiro and its Mangahewa field, and a 70 percent stake in a permit on the region's western coast in partnership with state-owned electricity generator Mighty River Power Ltd.

In August, New Zealand Oil & Gas Ltd., the country's biggest publicly traded explorer, said it wouldn't participate in the block offer citing the limited scope for sizeable discoveries.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net