N.Z. May Seek Exploration Bids for Raukumara Basin This Year

By Gavin Evans

Sept. 15 (Bloomberg) -- New Zealand's government may this year seek exploration proposals for the Raukumara basin off the east coast of the North Island, which could potentially hold the country's largest oil and gas reserves.

``I would hope it would be in the next few months,'' Associate Energy Minister Harry Duynhoven told reporters after a speech at the New Zealand Energy Summit in Wellington today. ``The indications are that it should be a very productive area'' and interest from international explorers is good, he said.

New Zealand gets most of its oil and gas from the Taranaki region on the west coast of the North Island. The government is paying for seismic studies of the country's deep water basins to lure global explorers and last year awarded permits to Exxon Mobil Corp., OMV AG and PTT Exploration & Production to the explore off the southern coast of the South Island.

Companies including partners Mitsui & Co. and Todd Energy Ltd. may invest as much as NZ$1.2 billion ($800 million) in five years in the Great South Basin, twice the current national exploration spending, Duynhoven said.

Some of the European companies who missed out on the Great South Basin are showing interest in Raukumara, he said, without naming them. Easier sea conditions, coupled with the potential for large discoveries, may encourage more international bids than the Great South offer.

``The seismic is telling us it's looking very useful,'' Duynhoven said.

Deep Water

Crown Minerals, the government department responsible for oil and minerals licensing, had previously planned to seek proposals for Raukumara in June. Bids will likely be sought this year regardless of national elections in November, Duynhoven said.

New Zealand lies along the Pacific and Australian tectonic plates and is crossed with faults that break up onshore oil and gas deposits and make drilling challenging.

The biggest potential lies in geologically ``quieter'' deep water offshore basins like Raukumara, where one structure is large enough to hold as much as one billion barrels of oil or 2.5 trillion cubic feet of gas, Chris Uruski, a geophysicist with state-owned GNS Science, said in March.

A find of that size would be the nation's largest oil field or the second-biggest gas find after the 3.8 trillion feet Maui find off the Taranaki coast, according to government data.

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