Royal Dutch Shell is leading an exploration project to look for natural gas off the southeast coast of New Zealand, Reuters reported. Shell will be working with oil and gas firms including Austria's OMV and Japan's Mitsui in the search for natural gas in the Great South Basin. This latest offshore drilling project will join U.S.-based firm Anadarko Petroleum in New Zealand waters, which is cooperating with Australia's Origin Energy. Anadarko has so far drilled one well off the North Island's west coast .
"We're very confident that any find will be natural gas rather than oil," Rob Jager, chairman of Shell New Zealand, told Reuters. "We believe there's less than a 1 percent chance that there's going to be oil."
Due to New Zealand's relatively small domestic gas market, Jager said the development will most likely lead to gas exports. He also said any Shell finds might result in a floating liquefied natural gas development.
Shell's test well worth $200 million could have a 30 percent success rate in the natural gas field, Jager told Radio New Zealand News. However, stakeholders in the companies involved in the project were confident.
"We compete for exploration funding globally, so to get shareholders' support for drilling in the Great South Basin is really exciting," Jager said.