30 Mar 2015

Low oil prices impacting exploration - expert

1:58 pm on 30 March 2015

There are concerns that international competition, geopolitical risks and low oil prices could have an impact on future investment.

At an international petroleum industry conference in Auckland, amid tight security aimed at keeping protesters out, the government announced its offering a mix of onshore and offshore blocks, covering an exploration area of about 430,000 square kilometres.

But an analyst with Wood Mackenzie Matthew Howell told the conference that low oil prices were impacting exploration and development.

"Obviously companies industry-wide have been heavily impacted by this change in oil price," he said.

"We see over US $60 billion of cash flow wiped out in Asia Pacific alone in just 2015."

"Obviously this is going to have a dramatic flow on effect to the investment decisions that companies are going to have to make," he added.

Mr Howell said companies were looking to cut costs and delay projects as a result.

He said the so-called 'above ground risks', which included such things as environmental protests, were also a concern for developers, particularly in areas adjacent to pristine sites, such as Pegasus Bay.

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