North opens doors again for oil

By Peter de Graaf

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This year's block offer excludes the area granted to Norway's Statoil last December.
This year's block offer excludes the area granted to Norway's Statoil last December.

A vast area of seabed off Northland's west coast has again been opened up to oil exploration.

Energy and Resources Minister Simon Bridges announced this week that 405,000sq km of land and sea - including a barely explored 75,000sq km in the Reinga-Northland Basin - had been put up for tender to oil and gas companies.

The area up for exploration off Northland is basically the same block that was offered in 2013, minus about 10,000sq km where Norwegian oil giant Statoil was granted a 15-year exploration permit last December.

The new attempt to entice oil companies has been cheered by business and Northland MP Mike Sabin, who said the industry had brought 5000 jobs to Taranaki and could do the same for Northland, but criticised by environmental groups and the Greens.

Ironically the new block offer came just a day after the UN released a climate change report warning that New Zealand risked rising sea levels, erosion, flooding and drought if greenhouse gas emissions caused mainly by fossil fuels were not curbed.

Mr Bridges acknowledged the need to respond to climate change but said fossil fuels would remain ''an important part of the mix'' for at least the next two decades.

Oil was already New Zealand's fourth largest export, worth $1.8 billion a year. If just one of the country's 18 basins turned out to be another Taranaki, it would be an economic game changer. The block offer had followed consultation with iwi, hapu and councils, he said.

Northland MP Mike Sabin said the block offer was a chance to find out what resources were out there and use the information to develop New Zealand's resource wealth. The oil and gas industry had brought more than 5000 jobs to Taranaki while contributing $2 billion to national GDP, $400 million in royalties and $300 million in company tax.

''The same formula can work just as well in Northland,'' he said.

BusinessNZ also welcomed the offer, saying it showed international investors the country was ''open for business''. It was also a chance to strengthen New Zealand's energy security.

Northland-based Green MP David Clendon, however, said New Zealand should be putting it efforts into moving towards a low-carbon economy, especially in light of this week's climate change report.

''All this exploration of frontier areas might extend the availability of cheap fossil fuel for another decade, but it's a finite fuel. We should be investing in alternatives rather than putting off the inevitable day of reckoning.''

Mr Clendon said there was no evidence that offshore drilling would be a job generator for Northland. And with oil companies paying 5 per cent royalties, New Zealand collected only a small proportion of the profit but carried all the risk to its seas and shore.

Forest and Bird lamented what it called Mr Bridges' ''garage sale''. Instead of pumping millions of dollars into seismic surveys to make New Zealand more attractive to oil firms, the group said the government should be creating a sustainable economy befitting the country's clean green image.

The exploration area granted to Statoil last year covers 9800sq km about 100km offshore in water up to 2km deep. The firm will spend the next three years carrying out seismic testing. If the results are promising it will explore for three more years before drilling in 2020 at the earliest.

NZ Petroleum and Minerals described the Reinga Basin as ''virtually unexplored'' and similar to the Taranaki Basin. It runs parallel to the west coast from Manukau Harbour to beyond the Three Kings Islands.

The latest tender will close on September 25. Permits will be awarded in December. Block offers have been released annually since 2012.

* The three onshore exploration areas in the East Coast, Taranaki and West Coast basins. Forest and Bird says they include lowland conservation land on the South Island's west coast, Ruahine Forest Park and eastern Taranaki. The five offshore areas are in the Reinga-Northland Basin, Taranaki Basin, New Caledonia Basin, Pegasus-East Coast Basin, and Great South-Canterbury Basin.

- NORTHERN ADVOCATE

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