Northern Advocate, 25 November 2014
Since Statoil was awarded an exploration permit offshore Northland in December 2013, I have visited New Zealand and Northland on several occasions to learn about different local perspectives, answer questions, and share our plans.
I understand there are some uncertainties around our activities. Let me share some details about the key topics.
- The permit: Our permit area in the Reinga Basin is located around 100km offshore from Northland. In our contract with the New Zealand Government, we are to determine the potential for oil or gas production from this area within 15 years. During the first six years we will collect and analyse data. If we conclude that the area is prospective and can be drilled with low risk, we plan to seek regulatory approval to drill a well in 2020.
- Deep sea operations: The permit sits in water depths of 1200 to 2000m. This is a familiar operating environment in our industry. Statoil alone has drilled more than 70 wells in similar depths, on all continents.
- Seismic survey: This summer, the seismic company TGS will collect 17,000 line kilometres of 2D seismic in the Reinga, Northland and Taranaki basins as a multi-client survey. Statoil has committed to buy the data collected within our permit area. Based on analysis of this data, Statoil will decide on further steps.
- Marine life: Through all our experience and participation in world-leading research, we are confident that a properly conducted seismic survey poses minimal risk for marine life. The process is the same basic principle as an ultrasound examination, but on a larger scale. Statoil requires our seismic contractors to apply the highest industry standards, and so does the New Zealand Government’s Seismic Code of Conduct. TGS uses the best available technology and operates to the highest standards.
- Value creation: Like any unexplored area in the world, the chance of finding nothing in the Reinga basin is far greater than finding a lot. Even if we are successful, development could take until 2030 before production can start. Only then would Statoil start to get paid for an investment in order of hundreds of millions of dollars. We do this because there is a small, but real chance the Reinga basin could be even more prolific than Taranaki. There is no doubt that most of the income would go to New Zealand. In addition to the tax revenues, there would be local jobs and contracts to local suppliers.
- Engagement: Our ambition is to demonstrate our strong commitments to the protection of the environment and society and to earn trust of Northlanders. As we proceed, we will meticulously assess all the relevant risks, engage with iwi, elected representatives and other local stakeholders.
We look forward to continuing to understand the local knowledge and ensure we address the concerns.
We will apply the same level of quality in our work here as we do in the North Sea; world-class performance in safe, efficient exploration.
Paal Haremo is vice-president of exploration in Statoil