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The south has already enjoyed one gold rush, and now the region is positioning itself to participate in a possible second, only this time the search is focused offshore, with the prize being the black gold of oil. By Neil Ritchie.
With that in mind, Dunedin City Council, Dunedin International Airport, Port Otago, Otago University and the Engineering Dunedin consortium of companies are working hard to attract the attention of the explorers involved in the southern search for black gold and the less lucrative, but still nationally important, natural gas. They say Dunedin is an excellent site for an exploration supply base from which to service the big rigs, supply boats and seismic vessels that will come from overseas. They also say the city – with its deepwater port, hospital, tertiary institutes and international airport – is the logical place for a logistics and support centre for the companies. Dunedin City Council business development advisor Des Adamson says the mood of the city, indeed the whole region, is optimistic. This is despite the nationwide economic downturn that has impacted every region and, in Otago, has meant the closure of Fisher & Paykel’s manufacturing facilities at Mosgiel, though F&P still has its research and development unit and call centre based in the Otago capital. “Dunedin is more positive than Auckland,” Adamson claims. And he cites the $200 million development project of the city’s covered stadium complex as one example of the region’s upbeat attitude. “And we have five large cranes dominating the skyline – one in the central city, one at Otago University, and three at the new covered stadium project. I can’t ever remember that many large cranes in Dunedin at any one time.” There are over 120,000 people in Dunedin, with about 25,000 of those being tertiary students, enhancing the “young” atmosphere of the city, with its many pubs, clubs, restaurants and night spots. Otago University has about half a dozen or so staff who have worked in the international oil industry, principally as geologists or geoscientists. So it is already involved in areas relating to oil and gas exploration and development, says James Henry, a marketing department lecturer within the university’s business school, and offering services that are relevant to the industry. He says the geology department’s project examining features within the upper 500m of the sea floor in the Great South Basin is a prime example of this. Adamson adds that the council, university, airport, port and engineering companies are well aware that the potentially large economic gains arising from active offshore exploration programmes will not flow immediately. They know the big benefits that energy that brought Taranaki were achieved over decades, not just years. During 2009 the oil and gas sector contributed a total of about $1 billion to the Taranaki economy, approximately 30 percent of the region’s gross domestic product (GDP), and the equivalent of almost 3000 fulltime employment positions. This GDP figure could climb to 38 percent on the back of future discoveries and developments. In an effort to keep abreast of developments, Otago officials regularly visit Wellington and Taranaki, as well as having some New Plymouth people, and others, head south. However, Invercargill and Southland are also eager to win over the oilies and are doing similar things to entice the explorers. Some months ago Invercargill Mayor Tim Shadbolt and senior officials visited New Plymouth, checking out the New Zealand energy industry capital, and three of them last November flew to Stavanger to check out how the Norwegian equivalent has grown and prospered from North Sea oil. The Dunedin organisations have also produced a DVD and booklet outlining why explorers should choose their city should be the operations support base for southern exploration. Port Chalmers, near the head of the Otago Peninsula, is the deepest port in the country with a draught of 13 metres. New Plymouth’s Port Taranaki – the port chosen for most offshore operations, only manages a draught of 12.5 metres. The inner harbour, close to the city itself, contains other wharves and facilities often used by explorers, such as bunkering facilities, storage areas, and large lay-down areas that are so important for offshore drilling operations where things as drill pipe, tubing and casing, drilling mud tanks and even oil rig derricks can be stored. The Dunedin people believe they are on the right track and recent comments by representatives of some energy companies give credence to that view. “Neither he (a representative of an offshore vessel) nor I can think of any other port where we have received such an efficient and friendly service . . . we have been seriously impressed by what we’ve seen here in Dunedin,” one oilie, industry jargon for someone involved in oil and gas, tells Adamson in an email. “The company and their guy have been very happy with the assistance received from the port . . . and impressed with the helicopter provider and the airport . . . it sounds like you are doing all the right things,” another says. However, Invercargill and Southland are also eager to win over the oilies and are doing similar things to entice the explorers. Earlier this year Invercargill Mayor Tim Shadbolt and senior officials visited New Plymouth, checking out the energy industry capital, and three of them later flew to Stavanger, the Norwegian equivalent that has grown and prospered considerably from North Sea oil. So it looks like provincial pride may mean some bruising encounters between the two regions – as in representative rugby clashes – until one, or perhaps both, get to share the spoils from any successful offshore oil and gas exploration.
Energy NZ Vol.4 No.2 March-April 2010 |
Five joint ventures – headed by super-major ExxonMobil, Austrian giant OMV, Australian Worldwide Exploration, fellow Aussie Origin Energy and private New Zealand company Greymouth Petroleum – could be spending a billion dollars or so exploring the harsh environment of the Great South Basin or the more benign waters off Canterbury and Otago over the next few years.