Story: Oil and gas

Page 4. Early petroleum exploration, 1865–1960

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Moturoa field, Taranaki

Seepages (places where oil seeps out of the ground) were the first sites that oil drillers targeted in New Zealand. Known seepages occur on the New Plymouth foreshore, Kōtuku on the West Coast, and Waitangi, north of Gisborne. At New Plymouth, bubbles of gas were seen along the coast, and on calm days an oily sheen could be seen on the sea water. In early 1865, gunsmith Edward M. Smith collected samples of oil he found among boulders at Ngāmotu Beach, on the New Plymouth foreshore. He sent them to Britain for analysis. Following this, the Taranaki provincial government offered £400 for the discovery of a commercial find of petroleum.

In 1865, a well was dug at Moturoa, on the New Plymouth foreshore, and in 1866 it struck gas at 7 metres and oil at 20 metres. Other wells soon appeared, but only a few barrels of oil were recovered in the first years. In 1904, some Australians brought the first steel drilling rig to New Zealand, and two years later they struck oil and gas. By 1913, crude oil was being held in storage in New Plymouth. A refinery was built, but local production was spasmodic and could not sustain it. In the late 1920s, a second refinery was built by locals (it closed in 1975). During the 1950s, some pumps sold Peak Petrol (named after Mt Taranaki), and the local council used Taranaki diesel in its vehicles.

Blowouts

In 1912, wooden derricks (drill platforms) were common. One of these, No. 5 derrick in the Moturoa field at New Plymouth, was saturated with petroleum as the result of numerous blowouts at the bore over several days in July. When another blowout occurred, the derrick was immediately engulfed in flames and burned to the ground.

Gas country

In 1937, the government passed the Petroleum Act to encourage overseas companies to look for oil and gas. Over the next decade, there was considerable exploration in several parts of the North Island and the West Coast of the South Island, spurred on by the need to find oil during the Second World War. Although several deep holes were drilled, all were dry.

In 1951, D’Arcy Exploration, overseas consultants for the New Zealand government, stated that the country was a gas prospect, but there was little chance of finding oil – and it was oil that the companies were really interested in. The impression that only gas could be found in New Zealand persisted for several decades.

Discovery of Kāpuni

In 1954, the Todd Brothers company obtained government leases to explore large areas of the North Island, and it involved two overseas oil companies, Shell and BP, in the work. The first large-scale seismic surveys were carried out in Taranaki farmland, revealing a promising underground structure near Kāpuni.

One Sunday morning in 1959, a drill rig at Kāpuni struck gas at a depth of 4,000 metres. The pressure was such that it forced the drilling mud back up the shaft, plastering the rig and workers with muck. Kāpuni was only a moderate-sized gas field by world standards, but it was large enough to meet the country’s requirements for gas.

Kāpuni gas replaced the gas produced from coal, which led to the demise of gasworks throughout the country. A gas treatment plant was built to reduce the water and carbon dioxide content of the gas before it was reticulated to users. High-pressure pipelines were laid to take the gas to Wellington and Auckland.

How to cite this page:

Roger Gregg and Carl Walrond, 'Oil and gas - Early petroleum exploration, 1865–1960', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/oil-and-gas/page-4 (accessed 25 July 2017)

Story by Roger Gregg and Carl Walrond, published 12 Jun 2006