WELLINGTON Jan 7 Royal Dutch Shell,
Austria's OMV and Japan's Mitsui will drill an
exploration well off New Zealand's southeast coast, becoming the
latest group to search for natural gas in the country's largely
untapped deepwater basins.
The Shell-led project would follow a programme by Anadarko
Petroleum of the United States to drill two deepwater
wildcat wells in New Zealand this year in a joint venture with
Australia's Origin Energy Ltd.
Anadarko has already started drilling its first well off the
west coast of the North Island.
After decades of neglect, interest in exploring in New
Zealand's rough seas has been on the rise following the
development -- spearheaded by Shell -- of floating LNG
facilities, as it means gas can be processed for shipping
without having to build an expensive onshore plant.
Shell on Tuesday said it planned to drill an initial project
well in the remote waters of the Great South Basin in 2016.
"We're very confident that any find will be natural gas
rather than oil. We believe there's less than a 1 percent chance
that there's going to be oil," Shell New Zealand Chairman Rob
Jager told Reuters.
"It's most likely going to be a gas export development," he
said, given the limited size of New Zealand's domestic gas
market. Shell saw the possibility that any find could lead to a
floating LNG development, Jager said.
The Anadarko and Shell projects follow a decades-old lull in
deep-water drilling in New Zealand's frontier basins.
U.S.-based Hunt Petroleum halted exploration in the Great
South Basin in the early 1980s due to harsh conditions and
political red tape.