10 Jul 2013

$200m oil drilling project looking more likely

3:17 pm on 10 July 2013

Oil company Shell says it is more optimistic it will go ahead with plans to deepsea drill for gas in the Great South Basin than it was several months ago.

In April, the company said there was a 50-50 chance of the $200 million project going ahead.

It must decide by January 2014 whether it will commit to the permit and drill the single well, or drop the licence altogether.

Shell's New Zealand exploration manager Roland Spuij says technical work has shown the prospect of finding gas looks better than previously thought.

He says the company is running the numbers and weighing up the benefits but "it's not a slam dunk yet".

Mr Spuij acknowledges that bringing in emergency equipment could pose a problem.

He says if there were a blow-out at sea, large emergency equipment would have to be flown in on big planes, which the runway at Dunedin airport is too short for.

Mr Spuij says it's likely the company would use Christchurch airport in the event of an emergency.