The potential of future discoveries of oil and gas is the subject of an Occasional Paper released by the Ministry of Business, Innovation and Employment today.
The paper looks at the scale of benefits – export growth, GDP growth, government revenue and regional development opportunities – if another petroleum basin is developed. To date, and despite good prospectivity, New Zealand has only one producing petroleum basin in Taranaki.
“The analysis looks at the potential economic outcomes from plausible oil and gas discovery and development scenarios, and assumes patterns of development over time that broadly follow those observed in Taranaki,” says Simon Lawrence, Manager Resources, in the Economic Development Group of the Ministry of Business, Innovation and Employment.
“Exports could grow by $1.5 billion per annum, royalty payments increase by $320 million per annum, and a further 5,500 jobs created.
“The local economy would benefit from wages provide to employees and growth of local businesses supplying the industry with goods, services and capital.
“With direct and indirect effects, national GDP could increase on average by $2.1 billion for each year of a 30-year development of a new basin.
“Looking at the impact of field development scenarios, it’s estimated that a single field could generate between $557 million and $3.2 billion in regional GDP over the life of the development.
“While the scenarios are hypothetical, the potential for growth of the oil and gas sector is real. There is reason to be confident that ongoing exploration investment will lead to new field discoveries and that local economies can benefit from such developments.”
The Occasional Paper draws together analysis from two technical reports from BERL and NZIER.
Read Economic contribution and potential of New Zealand’s oil and gas industry and download the technical reports from www.med.govt.nz/sectors-industries/natural-resources/oil-and-gas/petroleum-expert-reports/economic-contribution-of-oil-and-gas-industry