Chinese oil and gas giant Sinopec has New Zealand in its sights as China moves to slake its thirst for fuel.
Sinopec president Wang Jiming, who discussed broad opportunities in a private meeting with Prime Minister Helen Clark at Auckland’s Hilton Hotel on Thursday, said his company was focused on gas fields in Taranaki and Northland.
Wang, who was in Auckland for the Inside the New China Summit, said he had been given a positive and friendly reception by Helen Clark.
Clark had expressed welcome and support to Chinese enterprises to take part in the exploration and development of New Zealand oil and gas resources.
She was not available to comment directly but her spokeswoman said the meeting was cordial.
Officials were deputed to hastily arrange a meeting between Wang and Crown Mineral Resource Group manager Adam Feeley to push discussions further. Wang said Feeley would provide Sinopec with more information on the gas field projects: Sinopec will study them and explore the possibilities of co-operation.
Sinopec’s interest comes at a time when the Government is seeking to attract more offshore interest in gas exploration as the Maui gas field winds down.
The Government has made changes to the tax treatment of oil and gas exploration to remove unnecessary barriers to offshore explorers.
Asked whether a Sinopec development proposal would make available gas for New Zealand as well as Chinese consumers, Wang replied: "Based upon careful studying of the related information, we would seriously consider the co-operation with New Zealand in the above-mentioned areas.
"If Sinopec takes part in the development of New Zealand’s oil and gas reserves we will give top priority to the demand of New Zealand and Chinese consumers."
Associate Finance Minister Harry Duynhoven said Sinopec’s interest was fortunate.
He stressed it was too early to say what form its investment would take if it eventuated but any deal that resulted in increased gas production would clearly benefit the consumer and the Government, which stood to extract royalty payments. US players had also expressed interest in the gas and oil fields since the foreshadowing of tax changes.
China’s interest in New Zealand’s energy and mineral reserves is not confined to oil and gas exploration.
Black Sands Exploration, a subsidiary of China’s Best Quality Life Group, has applied to Crown Minerals for a permit to mine a 3617sq m stretch of coast between Taranaki and Kaipara for iron sands. Consultants understood to be acting for iwi groups claim the move will lead to erosion of the sea bed. But Duynhoven said the claim was nonsense as the iron-bearing material was extracted from the sand before export.
The publicly-listed Sinopec Corp, short for China Petroleum & Chemical Corporation, recently made a raft of offshore deals, particularly in Saudi Arabia and Venezuela, to secure oil and gas reserves.
The interest is not one-sided.
Energy Minister Trevor Mallard recently promoted the international sale of New Zealand gas technologies.
The Government is also reviewing the tax rules applying to non-resident drilling rights operators which have to travel large distances to reach this country.
Among specific changes are: a reduction in gas royalties from 5 per cent to 1 per cent on production from discoveries made within 2004-2009 and deductions in relation to accounting profit royalties on production from discoveries of exploration and prospecting costs incurred in New Zealand.
By Fran O'Sullivan Email Fran