The last offshore exploration permit off the east coast of the South Island of New Zealand has been relinquished leaving the country’s offshore petroleum exploration industry confined to the Taranaki basin off the west coast of the North Island.
New Zealand Oil & Gas Ltd. (NZOG) walked away from its final permit this week, marking the end of an era for exploration off the South Island without a commercial success.
The permit, 55794 (Toroa), covered 5000 sq km in the Great South basin to the east of Stewart Island.
The relinquishment follows a number of other withdrawals, including OMV and Beach Energy, from the great South and Canterbury basins in the last few months.
NZOG said the relinquishment was made for a number of reasons, including adverse regulatory settings for offshore exploration, the failure of wells in neighboring permits to make any commercial discoveries thus downgrading the region, and the effect of the COVID-19 pandemic on drilling costs and rig availability.
The company said it had exhausted all avenues to find potential partners to farm into the acreage and share the cost of a drilling program.
New Zealand’s oil and gas industry is once again limited to the areas surrounding the known Taranaki fields at a time when the country’s gas supplies are dwindling.