New Zealand wants operators to look past the North Sea weather conditions in its Great South Basin and look at the North Sea promise in the basin structures as it opens its first licensing round in New Zealand’s largest petroleum province.


“Companies see prospects that interest them despite the hostile conditions. A North Sea platform would work in the Great South Basin,” said David Darby, business development manager in the natural resources group for GNS Science, New Zealand’s geoscience provider.


He backs up his opinion of the promise of the basin with a new 2-D seismic survey completed earlier this year. See www.crownminerals.govt.nz/petroleum/blocks/greatsouth.html for details on the basin and the licensing round.


New data provided the first mapping of the basement and revealed a series of lystic faults. It found sediment as deep as 7 seconds of seismic travel time, about 7.5 miles (12 km).


“The new seismic survey has already changed our understanding of the Great South Basin. Previous data showed only the crests of many fault blocks, and now we can see how extensional processes worked in this region,” said Chris Ursuki, frontier basins project leader for the company.


The 1,236 miles (3,200 km) of new surveys cross the locations of five of the eight wells drilled in the basin by Hunt Resources in the 1970s and 1980s. Among those wells, Tara-1 showed a significant oil column. A core pulled from the well streamed thick, black oil, Darby said. The Toroa-1 also offered oil and gas shows. The showcase well in the basin is the Kawau-1A. That 6.8 MMcf/d well found a structure that offers up to 1 Tcf of gas but, at 12,579 ft, it wasn’t economical when Hunt drilled the prospect.


Economics may be a problem. Of course, oil discoveries could operate like North Sea fields offloading oil stored on floating production, storage and offloading vessels to shuttle tankers. Gas would require a different treatment. New Zealand’s South Island has no gas infrastructure. A liquefied natural gas plant, compressed natural gas or an electrical generation plant are among the prime uses for gas discoveries.


Aside from those considerations, the Great South Basin, unlike other New Zealand basins, is a long way from the plate boundary and should be a stable area for exploitation. On the other hand, Darby said, Hunt ran into technical problems in its well program in the area, including lost drilling strings.


About a third of the basin lies in water depths of less than 656 ft (200 m), but the water depth in the deeper section goes to 3,281 ft (1,000 m), he added.


Darby said his background is in basin modeling and this basin has a lot of structures “an order of magnitude larger” than other New Zealand basins. Among them are prospects with 77 sq miles (200 sq km) of closure in a subtle feature. The seismic also shows trends with series of target prospects.


Basin modeling shows approximately 1,800 billion bbl of oil and 180 Tcf of gas have been expelled from source rock.


Bids for the current licensing round of 40 blocks in the Great South Basin are due at 5 p.m. Wellington time March 31, 2007.


Bidders may bid for as little as one quarter of one of the 50- by 70-mile (80- by 11- km) blocks with blocks allocated to the best work program based on increasing the knowledge of New Zealand petroleum potential.


Companies will be rated on financial and technical qualifications and the extent of the work programs planned. Those programs may be staged with no more than three stages, but each block requires its own work program.


Terms include standard royalties of 5% of net revenues from petroleum sales or 20% of accounting profits from production.


Wells drilled by the end of 2009 get special treatment. The royalty drops to 1% on net revenues or 15% of accounting-profits on the first US $494 million. Permit fees range from $3,960 for prospecting and exploration to $16,470 for mining permits.