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Petrobas, Brazil's largest Oil company, enters New Zealand's Oil and Gas industry via Raukumara basin

 

Brazilian global giant oil company, Petrobas today announced that it had acquired exploration rights for offshore oil drilling in New Zealand. The acquisition was made by the company’s subsidiary, Petrobas International Braspetro, through a public tender that was launched by the New Zealand government in January.

 

Tuesday’s public announcement makes it official that the Brazilian company’s agreement with the government now grants the company rights for mining in the country. New Zealand energy minister announced today that the deal would allow Petrobas to explore for oil and gas in the relatively unexplored Raukumara basin on the east coast of the North Island.  This came in the wake of the New Zealand government’s bid to attract major global investors in the Oil and Gas industry into investing in the country.

 

The minister said that getting such big companies as Petrobas to explore oil in the country had been an ongoing government project for the last 18 months. New Zealand had initially tried to woo investors in the oil industry at a global petroleum conference in Mexico earlier this year.

 

Petrobas was granted a five year permit that covers 12,333km², the first in the Raukumara Basin area.  The minister described Petrobas International Braspetro B.V (owned by Brazilian state owned Petroleo Brasileiro S.A) as one of the biggest players in the global oil and gas industry. The Brazilian state owned company is the largest business in Brazil with annual revenues topping US$118.3 billion and investments in 18 territories situated in Africa, US, South America and Asia. The New Zealand venture is Petrobas’ first in New Zealand though it recently farmed in to permits involving NZX-listed Cue Energy on the Australian North-West shelf.

 

However, the investment announcement came amidst government concerns that it is watching the deep-sea drilling crisis in the Gulf of Mexico closely and would make an announcement over the matter in the coming days. The New Zealand Environmental Defence Society, in response to the announcement, called for exploration of oil to be subjected to “exhaustive resource consenting process involving public hearings, assessment of environmental effects, and strict monitoring coupled with bonds for non-performance”. They seek to have the Environmental Protection Authority’s jurisdiction over all exploration and mining activities increased to enable it step in as the regional council for purposes of the Act on resource management that should be given expanded scope.

 

Even so, the five year permit will see the Brazilian state owned Oil Company spend about an estimated $156 million.

 

June 3, 2010.

 

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