New Caledonia Basin

Map showing New Caledonia Basin permit, North Island of New Zealand, ECS, and EEZ.

The New Caledonia Basin is remote and situated some 250 to 1,000km to the North-west of the North Island within New Zealand’s Exclusive Economic Zone (EEZ) and Extended Continental Shelf (ECS). The area covers 147,000km2 and is relatively unknown from a scientific perspective.

The prospecting permit is valid until December 2016. The permit requires mapping of the seafloor by Multi-Beam Echo Sounding (MBES) and it also requires imaging of the earth’s subsurface (below the seafloor) with a 2D seismic survey.

This mapping will contribute to New Zealand’s Ocean Survey 20/20 programme, which aims to improve knowledge of its ocean territory, including within the EEZ and ECS, by 2020.

The MBES survey was completed in August – September 2014 with a New Zealand research vessel. Shell voluntarily included marine mammal and seabird observers on the survey to help gather information about this remote area.

The 2D seismic survey was safely conducted between December 2015 and March 2016 and was one of the largest and remotest ever undertaken by Shell. The marine crew for the survey was from New Zealand and survey expenditure injected some $5 million into the New Zealand economy. A highlight of the survey was the inclusion of Māori Marine Mammal Observers that Shell had supported for their training. They played an important role in helping to ensure that the survey was conducted in accordance with the Department of Conservation’s Code of Conduct to minimise potential disturbance to marine mammals.

Shell (37.5%) is the operator of the permit and CNOOC International Limited (37.5%) and Anadarko New Zealand Company (25%) are joint venture parties.

Unlike an exploration permit, a prospecting permit provides Shell and the JV parties with knowledge, but provides no future rights to further energy resource exploration (e.g. drilling) in this area.

Great South Basin

About the Great South Basin venture

Shell took over operatorship and a 50% share in the venture on 1 April 2012. As of 1 December 2013, the joint venture parties are Shell New Zealand, OMV New Zealand Ltd and Mitsui E&P Australia Pty Ltd.

The current area of awarded exploration permits (PEP 50119 and PEP 54863) covers approximately 25,000km2; mainly in deep water (1,000 metres deep).
PEP 50119 owned: Shell 61%, OMV NZ 22%, Mitsui Australia 21%
PEP 54863 owned: Shell 59%, OMV NZ 15%, Mitsui Australia 26%
Operator: Shell NZ (2011) Limited

Seismic surveys

To understand the sub-surface strata deep below the sea floor, seismic surveys have been conducted. Both 2D and 3D seismic surveys have been conducted over PEP 50119.

A three month 2D seismic programme was completed in April 2014 and involved acquiring seismic information across PEP 54863 and the northern part of PEP 50119, an area not covered by the earlier seismic programmes.

Decision to drill

The Great South Basin joint venture parties will drill an exploration well in the PEP 50119 block, to assess the presence and volume of hydrocarbons. Under revised permit conditions, this must be implemented by July 11, 2019.

As with most new basins, there is a small chance of finding hydrocarbons. If we find hydrocarbons, our research and previous exploration in the region shows that we are likely to find natural gas rather than oil. Several years of detailed planning has already been conducted and will continue before we begin to drill the natural gas exploration well.

As the location is remote, any discovery would need to be significant in order to be commercially feasible and such a development would typically take 10 to 15 years from drilling the exploration well until first gas.

We are very grateful to the communities of Otago and Southland for the way in which they have engaged with us so far. We will ensure that open and honest engagement with all interested parties continues as the project matures towards the drilling campaign. Technical planning will be ongoing.

This is an exciting opportunity for natural gas exploration in New Zealand and a new chapter in Shell New Zealand’s 100 year history. As always, safety and looking after the environment will be our number one business objective.

Eight wells were drilled in the Great South Basin from 1976 – 1983, with two uneconomic (gas) discoveries. Exploration began again in 2007 with joint venture parties OMV New Zealand Ltd, PTTEP and Mitsui E&P Australia Pty Ltd.

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