TAG Oil and its partner Apache – both Canadian companies – have the rights to 500,000 hectares around Gisborne and South Hawkes Bay. TAG Oil says they have had some success in finding gas although they have not developed any wells yet. The company told shareholders they believe there could be billions of barrels of oil in these two areas. On the other hand, the company told locals that usually there is only a 10% to 20% chance of finding a lot of oil when they drill a well.
It costs millions of dollars to drill for oil and gas. TAG Oil plans to raise that money through its shareholders. The company also has the technology to drill through soft shale which is difficult rock. It is also drilling in Taranaki on the west coast of the North Island at the moment.
TAG has invited some of the Gisborne council staff to Canada for 10 days to see what they are doing there. One Gisborne councillor said a free trip to Canada could be a bribe. He said the oil industry is not welcome in Gisborne. Instead the government should be spending money on clean technology and renewable energy: wind, hydro and geo-thermal energy.
Vocabulary
shale – soft rock from mud or clay
bribe – give money or something valuable to encourage someone to do something
renewable – can use it again and again; also called “sustainable energy”
Questions
What are the advantages for the local area if there is a lot of oil or gas in the wells? Are there any advantages for New Zealand? What are the disadvantages?