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Oil and gas company drilling illegal wells

It has been revealed the country's biggest oil and gas company has breached new environmental laws by drilling two wells off the Taranaki coast.

Drilling out the side of an existing well to look for more oil and gas is known as creating an "extension well".

Shell Todd Oil has done it on the Maui gas rig off the coast of Taranaki, and official documents reveal the Environmental Protection Authority (EPA) has major concerns.

"What these documents show is that the EPA has found that Shell are effectively drilling illegal wells," says Green Party co-leader Russel Norman.

This is what has happened at the Maui rig: the old well, which goes straight into the seafloor, has been exhausted. The company is using new technology to effectively make an extension well that reaches a total of 6.5km.

"It's deeply concerning that one of the world's major oil companies is in New Zealand drilling very long wells without getting any legal permission to do so, according to the EPA," says Dr Norman.

It comes down to the new exclusive economic zone law, which came into force in June 2013.

Existing oil and gas exploration activity was exempt. But the EPA has ruled two extension wells Shell Todd drilled "commenced after this date", meaning it needed a marine consent or special ruling from the EPA.

That was not done, so the EPA says drilling the wells was a restricted activity and "not authorised".

"It is inevitable with a brand new law, and we've never had regulation around the exclusive economic zone around these activities, that there's a bit of argy-bargy what is or is outside the law," says Environment Minister Nick Smith.

Shell Todd believes it started the drilling work before the new law came into force, so it thought it was exempt.

The company said in a statement: "It is not uncommon with new legislation that there are different interpretations initially."

It says in its view, its drilling has "no adverse impact on the environment".

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Published on:
October 23, 2014
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