Pipels At Cenovus Foster Creek SAGD Oil Sands
IN PHOTO: A view of oil production pipes at the Cenovus Foster Creek SAGD oil sands operations near Cold Lake, Alberta, July 9, 2012. Cenovus' oil production grew 14 percent while their 2012 first quarter cash flow was up 30 percent over last year, according to the company's news release. Reuters/Todd Korol

Despite positioning renewables as the future energy source and energy footprint, the New Zealand government has announced that it is readying to auction more permits for fresh oil and gas drilling exploration in different basins. “Oil is our fourth-largest export, and brings in around NZ$700 million (686.27 million) each year in royalties and taxes.” New Zealand Energy Minister Simon Bridges said in a statement.

The minister said the money will be ploughed back into the communities by investing in key infrastructure projects such as roads, schools and hospitals. In the new annual auction for oil and natural gas, there will be three reserve areas on offer with a combined acreage of 165,752 square miles, most of it is offshore. The government said there are 149 million barrels of oil reserves remaining in fields, which are already in production. The gas production in New Zealand has been around 450 million cubic feet per day in 2011. The minister claimed that permits awarded in 2014 translated to NZ$84 million with potential for another NZ $760 million in new activity. "It is clear that companies are seeking frontier acreage and long-term opportunities like those which New Zealand has to offer, and this government remains committed to attracting major international companies to invest in exploration and development in this country,” Bridges said.

The new announcement looks a bit contrasting from the priority accorded by the Government for electricity generated from renewable resources. It said in 2014, the share of electricity generated from renewables was 79.9 percent and it showed a 5 percent increase from 2013 and was a record. The government says it aims to generate 90 percent of its electricity supplied through renewable resources by 2025.

Proposed Areas

Bridges also outlined the details of new areas. In 2015, already two onshore areas in the West Coast Basin and one in Taranaki have been offered on Block Offer. There are four offshore areas in the Reigna-Northland Basin, Taranaki Basin, Pegasus Basin and Great South-Canterbury Basin. In the new tender, the total acreage will be 429,298 square kilometres with more than 4000 square kilometres in onshore, reports NZ Herald.

Oil is New Zealand's fourth largest export commodity and is heavily concentrated on Taranaki. Bridges said the government wanted more activity in the other 17 petroleum basins that are underexplored. The Government is hoping to attract big overseas explorers to the country. Since 2012, the New Zealand Government has granted 35 exploration permits throughout the country.

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