Texans optimistic on N.Z. oil

Press, Volume CXI, Issue 32554, 13 March 1971, Page 19

Texans optimistic on N.Z. oil

(From

BRUCE KOHN.

1, N.Z.P.A. staff correspondent.)

WASHINGTON, March 11, New Zealand may be on the verge of oil and gas discoveries comparable with those made in southern states of America, according to Texas oilmen. Those connected with the search for oil in New Zealand believe the chances of a series of major finds—by world standards—are extremely high. Their view is that New Zealanders do not appreciate the significance of the finds

made to date, nor the implications of the rush for concessions which has gone on during the last decade. Mr E. G. Wallace, president of Republic Minerals, which holds drilling concessions in Waikato and Northland, said in Houston yesterday: “We’re hunting in elephant country. The structures out there make your mouth water." He and other Taxas oil executives believe that the potential of both on shore and undersea structures has been capable of appreciation only during the last three years, as full seismic data have become available. “We know New Zealand is on the verge of something big, on shore as well as off shore,” Mr Wallace said. "The next two years will be the big ones. “When you find structures of this age and in this environment you're looking in elephant country. It could be really big.” He compared structures found in New Zealand with those discovered in Texas and Louisiana, which have since been developed into some of the world’s biggest oil and gas fields. Production in these two states totals more than 2m barrels a day. Besides selecting the Waikato Basin as a potentially rich source of oil, Mr Alexander named Northland, the undersea area off the Canterbury coast, and Westland

as areas in which he felt that big finds were likely. Republican Oil has drilling concessions in Northland, round Kaitaia, but Mr Alexander did not confine his enthusiasm to these concessions. "I think New Zealand Petroleum has excellent chances of making a big find, particularly round Hokianga,” he said. He believed the New Zealand Petroleum Company had “scored a hit" when drilling some time ago off Hokianga, but that the firm had not been able to press the discovery further because the “hole" collapsed under high pressures in the well. Mr Alexander said New Zealanders did not yet appreciate the potential held out to prospecting oil companies because sufficient information had been available only during th last two to three years. This view was supported by Mr W. I. Lee, president of Triton Oil and Gas, whose company has a 21 per cent holding in New Zealand Petroleum. Mr Lee was reluctant to talk off the record about discovery propects, but he felt they were extremely good. Both he and Mr Alexander said the succes in drilling in New Zealand so far had been extremely good by world standards. Mr Alexander believed New Zealand would want a

daily production rata of 150,000 barrels before permitting export to take place. Its own daily consumption was 80,000 barrels, and he thought emergency considerations would dictate a requirement of production at almost twice that rate before export contracts were approved. Japan and Australia are the two nations most often mentioned as likely export outlets should the beliefs of Mr Alexander and Mr Lee prove correct. Views differ on the disposal of the vast quantities of gas discovered in the Maui field. Mr Alexander said the quantity available would have to be extremely high to justify the establishment of a liquefication plant and subsequent export of liquified gas. He thought liquification plant could cost between SUSSOm and USIOOm. Ships to carry the gas would cost as much as SUSSm. The process of liquefing natural gas was, he said, a comparatively new one. Algeria was the only country doing it in a major way. Other oil authorities said that a large petro-chemical plant would be advantageous to New Zealand itself and would also provide the most economic method of using the gas. Development costs would be extremely high but, they believed, well worth while.