19 Nov 2009

NZ oil and gas fields 'open for business' - Energy Minister

8:33 am on 19 November 2009

New Zealand is declaring itself "open for business" regarding petroleum exploration. This was announced Wednesday by Energy and Resources Minister Gerry Brownlee, who says potential oil and gas reserves could be worth $30 billion a year by 2025.

Mr Brownlee told a conference in Wellington that successive governments had failed to take advantage of New Zealand's potentially large oil and gas resources.

He outlined a plan to encourage exploration that includes adjusting taxation and royalty regimes, possible extra resources to manage petroleum, and revising the Crown Minerals Act and the New Zealand Energy Strategy.

Geologist cautions against overstating potential

A petroleum geologist has cautioned, however, against overstating the country's potential oil and gas resources.

Mr Brownlee was citing a study by GNS Science that has revealed impressive oil and gas potential in 10 offshore basins, but study leader Peter King says that while there's undoubted potential, much still needs to be done to prove the resources. The study revaluated existing technical data, Mr King says.

Mr Brownlee says the potential for gas production from methane hydrates is 20 times that of the Maui gas field.

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Environmental impact

Environmental and Conservation Organisations spokesperson Cath Wallace says the move could harm New Zealand's credibility at the climate change conference in Copenhagen, since petroleum and gas exploration is a major source of greenhouse gases.

However Mr Brownlee says much of the oil used in New Zealand is imported. This has an environmental cost which would be lessened if oil was sourced locally, he says.