NZ Oil & Gas set to prospect off Tunisian coast

New Zealand Oil and Gas (NZOG) says it has been granted a prospecting permit in the Gulf of Gabes, off the coast of Tunisia.

NZOG chief executive David Salisbury travelled to Tunis for a formal signing agreement involving Tunisia’s Minister of Industry and Technology, its director-general of energy, and the chairman of the state-owned petroleum company, L'Enterprise Tunisienne d'Activites Petrolieres (ETAP).

NZOG will process and analyse existing data during the two-year permit period, and acquire 350km of new 2D seismic data, at a cost of $US3 million ($NZ3.67m).

NZOG had been assessing opportunities in the north African state since 2008, Mr Salisbury said in a statement.

Tunisia has been politically unsettled of late. This year a popular uprising resulted in the overthrow of President Zine el Abidine Ben Ali and the establishment of a national unity government.

NZOG had actually applied to work under the old regime, which was widely criticised for its constraints on democratic freedoms.

NZOG’s strategy was to establish a couple of new core areas outside of New Zealand, Mr Salisbury said.

"During NZOG’s search for suitable overseas opportunities, our attention has returned repeatedly to Tunisia due to its combination of good prospectivity, established exploration and production activity levels, reasonable fiscal terms, and ease of doing business," Mr Salisbury said.

This year's move toward more open democracy in Tunisia enhanced its attractiveness as an investment destination and the company was in the process of opening a Tunis office.

At the end of two years NZOG had priority rights to apply for a subsequent four year exploration permit.

The Diodore permit covers an area of 1236 square km and is for an area surrounded on all sides by discovered and producing oil and gas fields.

Oil was first discovered in the Gulf in 1966, and Tunisia has proven oil reserves of around half a billion barrels and current oil production of around 90,000 barrels a day, from both onshore and offshore fields. Proven gas reserves are around 100 billion cubic metres.