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New Zealand opens area greater than its size for oil exploration

BY MATTHEW BROCKETT

WELLINGTON, New Zealand (Bloomberg) -- New Zealand opened areas totaling more than one and a half times its land size for oil and gas exploration, saying the potential for petroleum production in the South Pacific nation has barely been tapped.

Some 405,000 sq km comprising three onshore and five offshore areas have been released for exploration by international companies, Energy and Resources Minister Simon Bridges said in a statement. Bids for blocks within the areas must be submitted by Sept.25, and permits will be awarded in December.

Energy policy may become one of the central issues in the Sept. 20 general election. While environmental groups and the opposition Green Party argue fossil fuels have no future and that drilling puts New Zealand’s natural beauty at risk, Prime Minister John Key’s National Party says a major oil find could transform the economy.

“Oil is our fourth-largest export, with a value of around $1.6 bn in 2012, but we have barely scratched the surface of our potential,” Bridges said. Only one of the country’s 18 basins is in production and if one more was opened “it would be an economic game-changer,” he said.

The new areas open for exploration affect both the North and South Islands.The onshore release areas are in the East Coast basin, Taranaki basin and West Coast basin, and the five offshore areas are in the Reinga-Northland basin, Taranaki basin, New Caledonia basin, Pegasus-East Coast basin and Great South-Canterbury basin.

New Zealand’s Petroleum Exploration and Production Association reported the news positively. While production from a successful discovery would be at least seven years away, regional economies are already reaping the rewards of a “thriving” oil and gas industry, CEO David Robinson said.

“The Blocks Offer process has been hugely successful at bringing world-class operators and investment to our shores,” he said.“We only welcome quality operators to New Zealand. It is very important to the industry that New Zealand’s pristine environment is safeguarded.”

Greenpeace Chief Policy Adviser Nathan Argent said New Zealand’s government is ignoring the threat of global warming by opening up new areas to drill and mine.

“They’re also turning their backs on the huge economic benefits that our own, New Zealand-grown innovative clean energy industry could give our country,”he said.“This cutting-edge sector could provide tens of thousands of jobs, and give our economy a multi-billion dollar boost. The oil industry cannot come close to matching these figures.”

04/01/2014

 

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