Saturday, April 26, 2008

A billion barrels of oil off Taranaki?

"You could have a tax holiday like Alaska, buddy," says Randall Thompson, chief of United States oil explorer Global Resource Holdings.

But our rosy future hinges on Global and Hyundai, a South Korean industrial giant, finding 1 billion barrels of oil in 900-meter-deep waters off Taranaki.

"We are looking seriously for 1 billion barrels," Mr Thompson said today. "I'm excited ... I believe it can be [found]. New Zealand has a great potential for giant reserves in the deep water ... there has never been a well drilled in deep water."

But the partners still have to conduct seismic exploration. Then, if that looks promising, they will have to bring in a giant oil company as a partner before drilling a well.

I feel there are too many ifs and buts here. Ever since I came to New Zealand in 1972, there has been speculative talk about untold wealth lying under the sea - either off Taranaki or in the Great South Basin - just waiting to be found. I'm not going to uncork the champagne until something tangible is produced.

We should also keep in mind the fact that, at today's rates of oil consumption, 1 billion barrels is little more than a flash in the carburetor.

And frankly, I think you can rule out a tax holiday in any eventuality. The Government will never run out of reasons to tax us.

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