Deep-sea oil permit canned

The last deep-sea oil and gas exploration permit off the coast of the South Island – long touted as the new “North Sea” – is set to be surrendered to the Crown.

New Zealand Oil and Gas has announced plans to relinquish its Toroa permit, which gave it permission to explore a 5,000-square-kilometre area south-east of Stewart Island.

Andrew Jeffries, chief executive, says it is the company’s last South Island permit and the last remaining oil and gas exploration permit outside of the Taranaki Basin.

The company also recently gave up its Clipper permit, an area off the coast of Oamaru that is estimated to contain the equivalent of 530 million barrels of oil.

Despite spending more than $30m across the two South Island permits, Jeffries explains NZ Oil and Gas has been unable to find a partner to develop the Toroa site within the timeframe set by the government.

He says he is disappointed NZ Oil and Gas was unable to discover the “North Sea of the South” and deliver economic benefits to Otago and Southland.

OMV and Beach Energy also dropped plans in recent months to continue explorations off the South Island coast.

New Zealand now has no active exploration permits outside of the Taranaki Basin.

“We remain active in New Zealand at the Kupe gas field in Taranaki and look forward to the start-up of our compression project there late this year,” adds Jeffries.