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
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 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.