23 Mar 2016

Joint venture bails out of oil hunt

9:07 pm on 23 March 2016

A joint venture has applied to surrender a permit to explore the Kaheru area off the Taranaki coast.

New Zealand Oil & Gas, Tag Oil and Beach Energy say the current conditions don't support drilling, which would have to start in May.

Wellington-based NZOG, which holds 35 percent, has said previously the area is not economically viable.

Tag owns 40 percent and Beach 25 percent.

With oil prices falling to the $US30 a barrel range, NZOG says it's putting greater emphasis on keeping exploration costs at a minimum.

Last year's slump in oil prices resulted in a smaller uptake in new petroleum licences.

However, the government last week announced five block offers for oil and gas exploration permits - including one onshore in Taranaki.

The others - Northland, Taranaki, Pegasus and East Coast Basins - were offshore.