New Zealand holds world-class resource potential. With 13 major sedimentary basins, prospective geology includes a range of sandstone (clastic) horizons as well as vast shales up to 600 metres thick. Potential hydrocarbon-bearing zones span a large range of depths from as little as 200 metres through more than 6,000 metres, where they at last encounter the deeply buried basement rocks. Since the late 1800s, hundreds of naturally occuring oil and gas seeps have been identified around the country.
The country has had oil and natural gas production for decades but growth was hindered by a combination of sectoral dominance by one major producer and continued reliance on aging technology and outdated exploration concepts. New Zealand’s first oil well was drilled in the early 1900s and oil production began at New Plymouth in 1934. To date, 100 percent of New Zealand’s oil and natural gas production has occurred in a single region, the Taranaki Basin in the western region of the North Island. There are numerous oil and natural gas-producing fields in the Taranaki Basin, with total production in 2010 averaging approximately 130,000 boe/d. There have been less than 500 wells in total drilled since 1950 in the Taranaki, both on shore and near offshore.
New Zealand also offers long-term potential for wider offshore exploration. Following the 2008 passing of the United Nation’s Law of the Sea, New Zealand obtained extraordinary offshore rights based on the idea that the country represents only 6 percent of a submerged continent. New Zealand now holds rights to some 5.7 million square km of ocean and seabed (22 times its land area) containing 18 known sedimentary basins. Some have compared New Zealand’s potential for a breakout in its energy development to Norway in the 1970s, just when development of the North Sea was commencing.