Tag Oil rubbishes land-buy claims
Last updated 05:00 07/05/2012

ROB MAETZIG

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A Canadian oil company has reacted furiously to a New Zealand media report that it had just purchased a huge tract of prime Taranaki farmland.

An article in yesterday's Sunday Star-Times claimed that Tag Oil had just received Overseas Investment Office approval to purchase 12,900 hectares of land – the equivalent of 162 average-sized dairy farms – as it looks to "accelerate exploration" in the region.

The article, under the headline "Anger as OIO lets fracking firm buy Taranaki farmland" also quoted Green Party energy spokesman Gareth Hughes describing the sale as an outrage and a cynical move to sidestep the normal resource consenting process.

Tag Oil Taranaki-based chief operating officer Drew Cadenhead said the article was garbage.

"We haven't purchased 12,900 hectares – it's a three-paddock lifestyle block near Inglewood totalling 12.9 hectares, and most of that land will be leased back to a neighbour for normal dairy-farming use," he said of the land on Upper Durham Rd, which is the site of the company's Sidewinder gas discovery.

"Part of the land contains a pad from where we have drilled four wells, and a small production station that processes the gas from those wells.

"All these facilities are contained in one two hectare paddock, but we purchased all the land because the previous owner wanted to sell it as one parcel," he said.

Mr Cadenhead also attacked continuing claims in the news media that Tag Oil fracks its wells in Taranaki.

"We don't. We don't at the Cheal field near Ngaere, and we don't at the Sidewinder field near Inglewood.

"We don't need to, because the wells in these fields are shallow, high-permeability wells that flow freely on their own.

"But somehow we've become the dirty frackers, because you people in the news media are frying our a.... without first doing some homework," he said.

Yesterday, Mr Hughes said the Green Party was not opposed to oil and gas development in Taranaki, but it continued to have major concerns over the effects of hydraulic fracturing – fracking – in which water and chemicals are pumped underground at high pressure to fracture rocks so it can flow oil and gas more freely.

"So with that in mind it is good news that Tag Oil don't intend fracking their wells in Taranaki," he said.

Mr Hughes said the Greens remained opposed to the sale of any New Zealand farmland of more than 5ha in size to overseas interests.

The Overseas Investment Office decision said Tag Oil wished to acquire the 12.9ha of Taranaki land to facilitate current and future operations and activities in relation to the Sidewinder discovery.

The transaction satisfied criteria relating to substantial and identifiable benefit to New Zealand, contained in the Overseas Investment Act 2002, said the decision.

Mr Cadenhead said future plans for Sidewinder included drilling up to four more wells.

They would be drilled from the existing drilling pad.