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oil : black gold for nz fields

  1. 52 Posts.
    Read on another post, thought it would be of interest to LMP holders

    Oil - black gold for NZ fields
    Feb 27, 2008 11:01 AM

    Climbing oil prices may be bad news for motorists, but it is good news for the New Zealand economy.

    Off the coast of Taranaki, several oil and gas fields are producing a lot more oil than Kiwis will consume at the pumps.

    The Tui project is one of several oil fields producing millions of barrels a month, and like most of the other working fields, it is doing better than expected.

    "We've had a bigger field, better production and an outstanding oil price," says New Zealand Oil & Gas CEO David Salisbury.

    However, barely a drop of raw oil being sourced off the coast will ever make it to New Zealand shores - much of the oil is going directly offshore where buyers are paying top dollar.

    "Again it comes back to the pricing issue. We will sell it to the purchaser who is paying the highest price. So there is an advantage if it could be processed domestically but it's still an issue of the highest net pack," says Salisbury.

    And, with such lucrative returns, further exploration may increase in Taranaki and around country.

    The Kupe oil and gas field off Taranaki the latest project. Although it is not yet in production, billions of dollars have already been invested.

    Gas from Kupe is expected to go online in about a year, but unlike oil, it will feed straight into the national grid and supply at least 15% of the country's annual demand.

    However, while the industry's future is rosy, those in the energy industry warn that oil exploration is a risky business with a high failure rate.

    "Not all the oils are successful. In fact the success rate in Taranaki is only about one in 10," says Origin Energy spokesperson Chris Bush.

    Similarly, Dennis Washer of Australian Worldwise Exploration says the industry is never without challenge.

    "We have to compete against the weather, we have to compete against geological surprises, the environment that we operate in is tough," he says.

    Risk aside, the oil industry is a global market with high demand and supply difficulties. With New Zealand's relatively untapped oil reserves and a business friendly production environment compared with overseas, experts believe the country has huge potential.

    Source: ONE News
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