A big oil discovery off Northland's west coast would be a huge boost for Northland's economy and could secure the country's fuel supplies if there was a global oil crisis, NZ Refining chief executive Ken Rivers says.
NZ Refining processes only 5 per cent of oil drilled from New Zealand waters, but has the capacity to refine far more and Mr Rivers said the organisation is excited about the prospects that could flow from oil being found off Northland's coast.
He said New Zealand's only refinery, at Marsden Point, is well placed to refine any oil found off the region.
Last week the Government started the process for awarding oil and gas exploration permits in seven onshore and three offshore blocks around the country, including the Northland/Reinga Basins, which stretch from Manukau Harbour, up Northland's west coast to above Cape Reinga in the Tasman Sea.
Energy and Resources Minister and Whangarei MP Phil Heatley said exploration benefits could be game-changers for Northland and predicted it could pour up to $2 billion into the national economy annually and create up to 5000 jobs in the region.
Mr Rivers said Northland should embrace the opportunity and while there were always risks associated with mineral exploration, if a good company with sound practices was awarded the rights to drill for oil, environmental concerns could be greatly mitigated.
"Finding oil or gas off our west coast would really be great for the region and we would be very interested in refining development of that resource," he said.
"There's a lot of talk about the risks associated with oil or gas exploration, but we've brought billions of barrels of oil into and out of the refinery over the past 50 years and we haven't had any spills. That's a demonstration of what can be done.
"That's not to say there are no risks, but managed properly, with great people that look after the environment and are responsible, it can be done safely and environmentally responsibly."
The refinery is about to start a $365 million development project to build a Continuous Catalyst Regeneration Platformer (CCR) that would increase its capacity.
North's oil could be NZ's saviour
The CCR development comes at the same time several oil refineries in Australia are closing down, increasing its chances of getting the refining rights to any Northland oil. "If oil is found it can be processed at Refining NZ, but the thing is New Zealand oil is of very high quality and overseas refineries will pay a premium for it. It makes high-quality products that are increasingly required around the world," he said. "While we've got the capacity [to refine any oil found] it's up to the customer to decide where they want it refined. But we're excited about the prospects of it."
Mr Rivers said another advantage of oil being discovered off Northland's coast could be if there was a global oil crisis and oil-producing countries decided not to sell their oil to others.
"We wouldn't want that to happen, but there would be very positive benefits of having oil production and refining in New Zealand. Our position is getting stronger and stronger."
Refining NZ produces almost all jet fuel used in New Zealand, about 80 per cent of diesel requirements and 55 per cent of petrol used. The Government will now consult with relevant iwi and councils until January 30. A final decision on areas to offer will be made in April, with bids due from exploration companies by September 30 and decision on allocations in December 2013.