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Running on empty in oil industry15 January 2006
A coastline bereft of oil rigs is as worrying a sign as low lake levels for a country counting down to an energy crisis.
Summer is usually the time when towering semi-submersible rigs head south to drill for oil and gas off New Zealand's coastline.
This summer, the seas are empty.
The Ocean Patriot rig was due in March to drill off the Canterbury and Taranaki coasts.
But more pressing business has kept it in the Bass Strait, near Tasmania, till September.
"There's a lot of water out there, and not much going on," said Murray Jackson, chief executive of Genesis Energy.
Without a big gas find - it will almost certainly come from an offshore, not an onshore discovery - electricity generators such as Genesis will want to import liquefied natural gas (LNG).

That will probably mean higher power bills for industry and households.
An almost non-existent offshore summer drilling programme is not the only worry for the petroleum exploration industry.
Last year was spectacularly busy in the onshore hunt for new oil and gas to replace the dying Maui gas field. It was also spectacularly unsuccessful.
A near-record 32 wells were drilled last year, mainly in Taranaki. Only four - Cardiff, Cheal, Piakau North and Supplejack - showed commercial quantities of hydrocarbon.
But none has been the blockbuster discovery that would pick the exploration industry up and allow New Zealanders to breathe more easily.
Figures prepared for the Petroleum Exploration and Production Association show last year's dismal showing - despite all the activity - was par for the course in recent years.
The early demise of the Maui gas field was signalled in late 2002, and 102 wells have since been drilled, 48 of them exploration wells with tantalising wild-cat prospects.
But all to no avail.
The news is not a lot better for the immediate future.
The number of exploration and development wells planned for this year is down on last year and 2004. But those numbers could increase as exploration plans develop.
The other looming worry is the announcement in the next few weeks of the results of the latest oil exploration tender.
Crown Minerals, which oversees oil and gas permitting and prospecting, will disclose who has won the right to search for energy in deep waters beyond the Maui field in Taranaki, and along stretches of coastline north of Raglan.
With sky-rocketing oil prices and explorers desperate for new acreage, Crown Minerals was last year talking up the prospects of significant interest.
But after bids closed last month, usually ebullient Crown Minerals general manager Adam Feeley was uncharacteristically quiet.
Highly placed industry sources say only a few of the nearly 10 blocks on offer have been taken up by global explorers, and none is willing to drill in deep-water Taranaki.
The bidding round is also said to have attracted no new names to prospect in New Zealand.
Tap Oil New Zealand general manager Clyde Bennett said explorers would welcome a successful block bid round. It would be the first since 2003.
"The more people actively exploring here, the better. We can share drilling costs and do more work," he said.
But global explorers had plenty of work elsewhere on wells with proven production.
"Neither deep-water Taranaki nor the more northern coastline are proven, so the risk-reward equation is harder," Bennett said.
Feeley would not comment until the results of the round were disclosed. "Whether the results are good or poor, we won't say anything till then."
He said there could be subsequent discussions with parties after the results were announced.
In briefing papers late last year, the Economic Development Ministry said New Zealand could have insufficient gas for producing power by 2010.
New gas reserves had to be discovered in the next two to three years if alternatives such as LNG were not discovered.
But Jackson said Genesis would have to decide on LNG before the middle of next year for necessary infrastructure to be in place by 2010.
"What happens with local gas exploration this year is looking critical for that decision," he said. "The score card for a significant gas find is not looking good."
His company had preferred New Plymouth as the place for a degasifying plant and distribution centre for LNG brought to New Zealand by tankers.
But recent plans by NZ Oil and Gas to stockpile Pike River coal at that port had meant a re-evaluation of Marsden Point.
"If you have a hot spot in a coal stockpile, you don't want a shipload of LNG coming into port," he said.
Feeley agreed timing was becoming increasingly tight for generators.
But he said it was too easy to see LNG as providing a secure solution.
Countries such as China, India and the US were taking huge quantities of LNG, and security of supply could no longer be taken for granted.
"What LNG New Zealand may need is a drop in the bucket in global terms, and we may end up paying a huge premium for already expensive LNG."
Feeley said the absence of oil rigs off the coast this summer was partly the result of the cycles and long lead times inherent in oil exploration.
Oil rigs were also becoming increasingly expensive as worldwide demand for their use increased. Since the last block tender, in 2003, the daily cost for an oil rig had risen from about $100,000 to about $400,000 a day.
Feeley said Crown Minerals was working with oil companies to co- ordinate approaches to rig owners to ensure a major offshore drilling programme next summer.
"Our priority is to have half a dozen prospects being drilled this time next year," Feeley said.
"If they and other drills are all dusters, then we will have to ask, `where next?'."