Norway's Statoil quits Reinga Basin

Friday 14 October 2016 09:30 AM

Norway's Statoil quits Reinga Basin

By Paul McBeth

Oct. 14 (BusinessDesk) - Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was "too low".

The Norwegian company will return the two exploration permits for the area it was awarded in 2013 and 2014, and has told the government of its decision, Statoil said in a statement. The data it collected will be made available to others, and it will shift its New Zealand focus to the four permits it holds off the North Island's southeast coast.

"After studying 2D seismic data of the search area for the past three years, we think the chance of making a large oil or gas discovery is small, so we have decided to conclude our exploration permits to the Crown," New Zealand country manager Brynjulc Klove said. "Some may speculate we are surrendering the permits for various reasons, but the only reason is that we see the probability too low to justify continuing our search."

The Reinga Basin permits were the first in the largely unexplored area and part of the government's plan to attract major global oil and gas producers to New Zealand to take advantage of the nation's resources. Statoil took a 30 percent interest in OMV's Pegasus Basin permit earlier this year.

Exploration well-drilling in New Zealand was scaled back as international oil prices slumped, making riskier ventures in far-flung prospects less attractive. Royal Dutch Shell is still reviewing its New Zealand operations, which could lead to a scaling back or even departure after more than a century of operation in the country.

(BusinessDesk)

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