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Oil reserves target met

Hon David Parker
Minister of Energy


19 December 2006
Media statement

Oil reserves target met

Energy Minister David Parker today announced that from 1 January 2007 New Zealand would meet its International Energy Agency (IEA) obligation to hold 90 days of oil reserves.

"The 90 day target is part of the energy security commitments in the draft New Zealand Energy Strategy so I am particularly pleased to confirm we will meet it very soon," Mr Parker said.

New Zealand's oil stocks have recently been as low as 60 days of net oil imports as a result of increasing demand and declining domestic oil production.

Earlier this year the Government let a global tender for additional oil stocks to meet the obligation. The stocks will be held under 'ticket' contracts, which provide the Government with an option to purchase petroleum in the event of an IEA-declared emergency.

Tickets have been secured for 406,000 tonnes of petrol and diesel for 2007 and 170,000 tonnes for 2008.

The tickets cover stock held in Australia, the Netherlands and the UK. Contracts are with BP, Shell and Total. The cost of the tickets for 2007 is US$7.2 million.

No bids to hold stock in New Zealand were received.

A further tender for around 100,000 tonnes for 2008 is expected to be let in the fourth quarter of 2007. At this stage additional stocks are not expected to be required for 2009 and 2010 because of expected increases in domestic oil production.

The Government has entered into bilateral arrangements with the governments of Australia, the UK and the Netherlands to enable the stocks to be counted towards New Zealand's IEA obligations. The arrangements require New Zealand to seek approvals for proposed quantities of tickets and include an undertaking by the host government not to impede release of stocks to New Zealand in the event of an emergency. It is proposed that the arrangement with the Netherlands will become a formal treaty in 2007.

"I would like to thank the governments of Australia, the UK and the Netherlands for their help and cooperation to enable New Zealand to meet its stock holding obligations," Mr Parker said.

ENDS

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