By Rebecca Howard
WELLINGTON, New Zealand--The New Zealand government Tuesday
awarded 15 oil exploration permits, including three to a joint
venture led by Chevron New Zealand Exploration Ltd, in the oil
giant's first foray into upstream in New Zealand.
In total, six onshore and nine offshore permits were awarded to
nine companies, up from the 10 permits awarded last year. Other new
entrants to New Zealand include India's ONGC Videsh Ltd and New
Zealand's New Endeavour Resources.
Oil is currently New Zealand's fourth-largest commodity export
after dairy, meat and wood. Oil and gas combined contribute more
than NZ$2.7 billion (US$2.5 billion) to gross domestic product each
year.
Chevron NZ, a unit of Chevron Corp. (CVX), will partner with
Statoil Lambda Netherlands BV in the Pegasus Basin off the east
coast of New Zealand's North Island.
"This is exploration in a frontier basin," said Liz Schwarze,
general manager for exploration with Chevron Asia Pacific
Exploration and Production, on the sidelines of the event to award
the permits. The water depths in the basin range from 2,600 feet to
9,800 feet. The three permits cover more than 6.26 million
acres.
Statoil Lambda Netherlands BV was also awarded another block off
the top of the North Island, adjacent to a permit it already
holds.
Ms. Schwarze said Chevron's initial commitment is for geological
studies, including 2D and 3D seismic data acquisition over a four
to five-year period.
"The earliest we would drill a well would be 2021," she said.
The initial investment, not including drilling, is for around NZ$77
million.
She said key to bringing Chevron to New Zealand was the
availability of multi-client seismic data for purchase, which made
it easier to assess the potential.
She declined to comment on current oil prices, saying
"exploration is a long-cycle activity ... but the world will
continue to need energy."
Write to Rebecca Howard at rebecca.howard@wsj.com