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Bloomberg: N.Z. Says `Substantial Interest’ Shown in Great South (Update1)

By Gavin Evans

April 4 (Bloomberg) — Global oil companies have shown “substantial interest” in bidding for exploration rights in the Great South basin off New Zealand’s southern coast, Associate Energy Minister Harry Duynhoven said today.

Proposals closed on April 2 for 40 exploration permits covering 360,000 square kilometers (140,000 square miles) of ocean. Royal Dutch Shell Plc, the biggest oil and gas producer in the country, said it didn’t submit a bid.

The basin, last explored during the oil shocks of the 1970s, is considered by the government’s Crown Minerals unit to have some of the best potential for large discoveries. Extending as much as 500 kilometers from the country’s South Island, it may contain fields holding as much as 7 trillion cubic feet of gas, according to some estimates.

“I am pleased with the number and variety of bids received,” Duynhoven said in a statement. He wouldn’t comment on the number of bids received, nor on Shell’s decision not to bid.

Shell has major stakes in New Zealand’s Maui, Pohokura and Kapuni fields and is the country’s largest gas producer.

“After careful consideration Shell has decided not to bid,” spokeswoman Jackie Maitland said. “We remain focused on maximizing the recovery of reserves from our major assets in New Zealand.”

In November, Exxon Mobil Corp. agreed terms with the government on how it would be able to use disputed seismic data over part of the basin if it participated in the bidding.

OMV AG, Central Europe’s biggest oil company and a partner with Shell in the Maui and Pohokura fields, has also previously indicated an interest in taking part in the Great South bidding.

Neither company was immediately available to comment.

To contact the reporter on this story: Gavin Evans in Wellington, New Zealand at [email protected]

Last Updated: April 4, 2007 01:50 EDT

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