Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Government should encourage further exploration

21 August 2005

Government should encourage further exploration for new oil reserves

The Government is being urged to invest in New Zealand’s long term oil supply security to provide a better safety net against oil shortages.

The Petroleum Exploration & Production Association (PEPANZ) said today that encouraging exploration for new reserves and accelerating the development of known resources, including those which are currently marginally economic, would give the country much greater capacity to survive overseas supply disruptions.

“The Government is being prudent with the measures in its recent report,” PEPANZ executive director, Dr Mike Patrick, said.

“However, we could avoid all this alarm, and the potential for third world carless days and public rationing, if Government put more emphasis on encouraging oil exploration.

“It is not addressing this option positively enough, despite the fact it offers many strategic benefits for the whole country.”

Dr Patrick said New Zealand's self sufficiency in indigenous oil has deteriorated from around 50% only a few years ago to 18% currently. The only new discovery being developed is Pohokura – other potential significant developments at Kupe, Tui and Maari are still awaiting final investment decisions by their operators.

“If Government addressed the fiscal barriers to their speedy development, it could return New Zealand to about 60% self-sufficiency in oil,” Dr Patrick said.

“The major barriers to discovering and developing new oil reserves are financial ones, particularly the royalties and the tax regime that Government imposes on oil producers.”

While acknowledging recent Government moves to encourage exploration, Dr Patrick said there is still some way to go before the cost of exploration here is low enough to encourage companies to invest in New Zealand rather than elsewhere where exploration costs are significantly lower.

“New Zealand suffers from the tyranny of distance, and coupled with the high demand internationally for drilling rigs and other services, the costs of exploring here are extremely high.

“As a consequence, PEPANZ has long sought Government support for further amendments to the taxation regime, and for royalty relief for new oil developments. This would create greater incentives for more intensive exploration and production.

“A fiscal regime that encourages the discovery of new oil reserves will also create a large number of jobs, reduce the use of overseas funds and save the consumer the costs of establishing an alternate oil supply security buffer.

“It will also alleviate the need for carless days and rationing,” Dr Patrick said.

ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>

Elsewhere:

Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:

Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>