Unlocking New Zealand's Petroleum Potential

Energy and Resources Minister Gerry Brownlee today announced the Government's Action Plan for unlocking and maximising New Zealand's petroleum potential, with a specific focus on exploration of New Zealand's offshore deepwater basins.


"This government is committed to implementing a proactive and targeted plan to ensure that New Zealand is a highly attractive global destination for petroleum exploration and production investment," said Mr Brownlee at the Biennial NZ Oil and Gas Outlook 2009 conference in Wellington today.


"New Zealand's largely unexplored petroleum resource could be one of the country's most significant economic opportunities. A successful and flourishing petroleum industry will be a significant and essential contributor to lifting New Zealand's economic performance going forward and to improving the quality of life for all New Zealanders," he said.


Currently the petroleum sector accounts for around $3 billion per annum of New Zealand's export revenue. Should the estimated resources in our unexplored basins be developed, this could increase to $30 billion per annum in export revenue by 2025. Crown receipts alone could increase to more than $10 billion per annum over the next 40 years.


"The immediate focus must be on increasing exploration activity and improving the knowledge of our petroleum basins. The Government must be seen as pro-development of petroleum resources to attract major investments of global capital to support exploration activity", said Mr Brownlee


In the last week, the MV Bergen Resolution has commenced a seismic survey of New Zealand's frontier basins as an important part of the Government's $20 million data acquisition programme to improve knowledge of our petroleum resources.


"Today I am releasing for feedback a proposed Action Plan setting out a series of additional actions that the Government will implement to assist the development of the petroleum sector in New Zealand", said Mr Brownlee.


Development of the plan has been supported by five government-commissioned reports, which are also being made available for public comment.


The Action Plan and background reports are available on the Ministry of Economic Development's website at www.med.govt.nz/petroleum-strategy.


Feedback and comments should be made to petroleum-strategy@med.govt.nz by 5.00pm Friday 29 January 2010.


Questions and Answers


What is the Government's Action Plan for development of New Zealand's petroleum resources?


Several immediate priorities have been identified by the Government to assist development of New Zealand's petroleum resources. The actions build on work completed to date, ongoing management of the Crown's petroleum estate, and initiatives such as the Government's seismic data acquisition programme.



Why develop the petroleum sector?


The potential contribution of the petroleum sector to our economic growth rate, levels of employment and investment in infrastructure is significantly underestimated.


With the assistance of GNS Science, officials have undertaken a desktop study of ten petroleum basins to estimate the resource that could be discovered and that is economic to produce.


While this work is by nature speculative, it provides us with the best estimate of the potential of our petroleum resources. New Zealand's petroleum resources have the potential to make a significant contribution to economic growth.


What work has been completed to date?


The Government recently commissioned five reports with the purpose of estimating likely petroleum resources and achievable revenues; independently reviewing our petroleum regime; assessing existing and future New Zealand capability in the petroleum sector; and identifying future government priorities for action.


These reports are:


•· GNS Science work quantifying New Zealand's petroleum potential and titled Potential Undiscovered Oil and Gas Resources of New Zealand, Phase II.


•· Michael Adams Reservoir Engineering Report titled Production and Cost Estimates for New Zealand's Petroleum Resources.


•· CAENZ report titled An Options analysis for the Commercial and Economic Development of Offshore Methane Hydrates as a Future Energy option for New Zealand.


•· AUPEC report titled Evaluation of the Petroleum Tax and Licensing Regime of New Zealand.


•· McDouall Stuart report titled Stepping Up - Options for Developing the Potential of New Zealand's Oil, Gas and Minerals Sector.