OMV's Great South Basin application draws 260 submissions

By Gavin Evans

June 10 (BusinessDesk) - More than 260 groups and individuals have submitted on OMV’s application to the Environmental Protection Authority to drill in the Great South Basin.

Most oppose the application citing concern about climate change – a ground the decision-making committee is specifically barred from considering. Many are also annoyed that the only aspect of OMV’s programme they get to submit on is a consent for the immeasurable trace quantities of potentially harmful substances that may – if spilled – end up washing off the deck of a drilling rig through its rainwater run-off systems.

Maori fishing trust Te Ohu Kaimoana was neutral on the application, but thought it was being handled “back to front” and should have been bundled with the other applications OMV will have to submit to the EPA for actual drilling. Those applications are non-notified and thus not open for public submissions.

The group urged OMV to develop engagement agreements with Ngai Tahu iwi that identify with the waters off the South Island’s south-east and suggested that any conditions imposed could include sampling of fish flesh before any drilling gets underway and afterwards.

OMV, which also operates the offshore Maui and Pohokura gas fields, expects to begin drilling towards the end of the year – potentially using the COSL Prospector. The four-year-old rig, designed for North Sea conditions, is due off Taranaki this week for a development drilling campaign at the Tui oil field.

OMV’s first well lies in about 1,200 metres of water 130 kilometres south-east of Balclutha. If successful, the programme could potentially involve drilling 10 wells, up to two further exploration wells and up to seven for appraisal.

The potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised. There are proven petroleum systems in the region but drilling has been sporadic since the 1970s. Activity dried up after the plunge in oil prices late 2014.

OMV and partner Mitsui have been exploring in the GSB for 12 years but are yet to drill a well. Their 16,700 square-kilometre permit, extended by the government last year, expires in July 2022 and requires the drilling of a well by July 2021. If drilling is successful the permit can be extended out to 2030.

OMV is required to seek the run-off consent due to an anomaly in the legislation policing the country’s Exclusive Economic Zone. The requirement was intended to apply only to production platforms – which process hydrocarbons daily and can remain in place for decades.

Two governments and the Ministry for the Environment have so far refused to fix the error. EPA staff have already advised the decision-making committee – Mark Farnsworth, Greg Shaw and Nicki Crauford – that the environmental impacts of the run-off will be negligible.

Last week, the International Energy Agency forecast a 10 percent increase in global gas use by 2024 driven by rising energy demand and efforts to reduce emissions from coal- and oil-fired industry and power generation.

China, also concerned to improve air quality in its major centres, will drive about 40 percent of that demand growth, the agency said.

Among parties speaking in support of the OMV proposal were the Petroleum Exploration and Production Association of New Zealand, the Major Electricity Users’ Group, the Otago Southland Employers’ Association and Bluff-based South Port New Zealand.

Port chief executive Nigel Gear said transition to a low-carbon economy is New Zealand’s ultimate goal, but the country needs to maintain security of energy supply and the resources available from Taranaki beyond the next 10-15 years is uncertain.

“Unfortunately, there is no clearly defined pathway for the economy to move to utilising large-scale ‘non-fossil fuel energy’ within this timeframe,” he said.

“The obvious transition energy is gas.”

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