Tuesday, January 26, 2021

Good riddance again

Last month OMV quit the Great South Basin and surrendered its offshore exploration permits outside of Taranaki. This month, Australian-owned Beach Energy has done the same:

Beach Energy Resources New Zealand has decided to abandon all of its oil and gas exploration permits off the South Island coast, including several off the coast of Otago, raising concerns about the economic impact on the region.

A company spokesman, based in Australia, told the Otago Daily Times the company had three oil and gas exploration permits off the coast, and had expected to begin drilling at the Wherry site in the Canterbury Basin this year.

"We had a certain timeframe to drill the well but we weren’t going to meet that timeframe.

This leaves NZOG's Toroa permit as the only offshore exploration permit off the South Island. They're required to commit to drill an exploration well by April 2022, and they've already had one extension on that. But with the current pandemic uncertainty and no longer being able to share costs with other permit-holders, it will hopefully be completely uneconomic and we'll see it surrendered.

(A bunch of OMV's Taranaki permits also have a requirement to commit to drill by this April, and drill by next April, but they're all marked as "change pending". Is the government cutting another sweetheart deal with the foreign oil industry in an effort to keep them around, and if so, why? If we are to have a future, they can't. It is that simple).