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NZ needs a real debate on oil and mining, say engineers

Article – BusinessDesk

Dec. 9 (BusinessDesk) – New Zealand can’t afford to write off the potential for wealth and growth in its oil, gas, and mineral estate, says the Institute of Professional Engineers in a paper released today.

NZ needs a real debate on oil and mining, say engineers

By Pattrick Smellie

Dec. 9 (BusinessDesk) – New Zealand can’t afford to write off the potential for wealth and growth in its oil, gas, and mineral estate, says the Institute of Professional Engineers in a paper released today.

The IPENZ call comes as the newly elected government committed to encouraging more oil and gas exploration, and controversy rising over deep-sea exploration and coal mining developments on the West Coast.

“As a nation seeking long-term prosperity we can’t afford to write off this kind of opportunity,” said IPENZ Chief Executive Andrew Cleland. “We need to investigate the checks and balances, and find innovative ways to take advantage of this vast resource.

“When the extraction issue arises in a community, we want people to be armed with knowledge; we want them to feel confident they are asking the right questions”.

The report was issued as OMV, the Austrian oil and gas company, announced it was about to start seismic survey work in its exploration permit areas in the Great South Basin, south of Dunedin and Invercargill.

It also coincided with an announcement by Shell New Zealand today that it was abandoning its Ruru exploration well, which it had hoped would extend the life of the Maui oil and gas field, because its exploration vessel had run out of time to finish it before returning to Alaska.

“Much has been made of Australia’s mineral wealth and the role it plays in keeping their economy buoyant,” said Cleland. “If people simply accepted what they heard in the media, they might consider that the issues are black and white – environment vs prosperity.

“IPENZ doesn’t see if that way,” but cited research showing “a significant number of New Zealanders believe minerals and petroleum cannot be extracted while the quality of our environment is maintained.”

In Wellington, OMV showed journalists around the Polarcus Alima, the seismic survey ship which will do the first three-dimensional seismic survey of two deep-sea exploration blocks to the south of Dunedin over this summer.

OMV has already spent $50 million on two-dimensional surveys in the Great South Basin, an area of legendary prospectivity which has never yielded a commercial discovery, but whose economics may be improving with deep-sea technology and the rising global price of oil and gas.

Shell explained the abandonment of Ruru in terms of a major equipment failure and the onset of foul weather and the winter for meaning the highly prospective well could not be completed.

It will be plugged and abandoned. Shell NZ made no mention of being eligible for penalty payments following the non-completion, and said it had brought the Noble Discoverer to start drilling the prospect in February, in shallow waters some 40 kilometre off the South Taranaki coast.

The ship got into difficulty while trying to leave the well-site during a storm.

“The vessel moved into deeper waters to ride out the storm and later docked at Port Taranaki to shelter for the winter period,” said Shell.

The accident resulted “millions of dollars” of repair work, undertaken by Taranaki firms that service New Zealand’s oil and gas sector.

“A Maritime NZ investigation concluded the Discoverer was operated appropriately in response to the incident and there were no ongoing safety issues with the vessel,” the Shell NZ statement said.

(BusinessDesk)

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