On February 17th TAG Oil, the company most involved in oil and gas exploration in Hawke’s Bay, issued its latest financials. The report included this assessment of the global situation and its impact on TAG’s capital expenditure plans:
Notice the elimination of a previously budgeted $19 million exploration investment slated for the ‘East Coast Basin’, and the comment that TAG would either find a partner to move forward or relinquish its permits. That looked to me like TAG was effectively calling it quits, at least for the foreseeable future, in our neck of the woods.
I asked TAG for an explanation. TAG Oil representative Garth Johnson responded as follows:
“TAG’s plan is to postpone further investment in the East Coast Basin. In the event that the Company can’t find a partner in the near future to contribute funding to further exploration, TAG will consider relinquishing the permits with the view that the Company could participate in a future blocks offer to once again acquire the areas of interest should the review of the data, as well as higher oil prices, encourage the Company to do so at a later date.”
I’m sure there are many in Hawke’s Bay who will be happy to hear the pressure is off for oil and gas development in the region, for now.
But this is all the more reason for the Regional Council to get moving with its ‘Energy Futures’ consultation process, as committed in HBRC’s current annual plan. We have a window of opportunity to consider our energy options, as opposed to simply drifting with the tide. The response received during the ‘pre-consultation’ conducted around the ‘Big Six’ issues HBRC floated for public comment in December, anticipating this year’s Long Term Plan (LTP) refresh, demonstrated that there’s deep public interest in energy issues and opportunities in the region.
HBRC staff have been doing some planning on how to address our energy future — what homework needs to be done, the consulting help required, and what the consultation process might entail. I’m confident that an inclusive process will soon get underway, with a full range of stakeholders to be involved in shaping the inquiry.
Stay tuned!
Tom Belford
And it is this boom bust cycle which clearly demonstrates why this industry should not feature in the furture of Hawkes Bay. Here one day and gone the next.
There is a continuing flood of evidence coming out of the USA confirming that the life span of a typical shale well is around 10 years. Hardly long term.