Energy and Resources Minister Simon Bridges says there will be certainty for the next three years. Photo / Brett Phibbs
Energy and Resources Minister Simon Bridges says there will be certainty for the next three years. Photo / Brett Phibbs
Election pleases explorers spending near record amounts in hunt for oil and gas.
Oil and gas explorers gathering in Auckland next week are breathing a sigh of relief at the election result but face the age-old challenge - making a major discovery.
Spending on the hunt for oil and gas is running around record levels and approaching its summer peak as the Governmentpromises a business-as-usual approach. Incumbent Energy and Resources Minister Simon Bridges said the next three years was about certainty after a "bumpy period". "We've had the regulatory changes ... now we're seeing world-class players come in. Over the next three years it's certainty and you're not going to see significant policy changes and bells and whistles from the Government."
The Government put in place new environmental, health and safety rules as well as a new fiscal regime. New laws also prevented protest vessels from being within 500m of survey ships.
More than 400 industry representatives will meet in Auckland next week for the Petroleum Summit, amid murmurings of disruption by protesters. "We'd come through a bumpy period but there's a broad acceptance from most New Zealanders who understand and want petroleum exploration provided it's done to world-class standards with health and safety and environmental protection," Bridges said.
Head of research at Woodward Partners John Kidd said given the large financial commitments and long lead times, election certainty was crucial for the sector.
"The sector lives on confidence and certainty and capital does flow where certainty is higher so I guess the clarity of the outcome would have been quite welcome across the sector."
While there was relief at the election result, Woodward Partners' quarterly outlook said about $330 million had been spent on five offshore wells that had come up commercially dry.
"We're in a real peak point around the spending going into the ground. The exploration programme has been broadly very disappointing and it is a sector where confidence is important."
There had been incremental discoveries at appraisal wells (those near productive oil fields) but these were relatively small and they were so far confined to Taranaki. Kidd said marketing campaigns are being affected because of the lack of success from exploration wells to date.
Bridges said finding resources in another basin would be a "game changer".
"Even good government can't change the rocks. The question now becomes one of finding the needle in the haystack," he said.
Greenpeace climate campaigner Steve Abel said New Zealand had to decide whether it was "backing the right horse" in the fossil fuels sector rather than moving to a sustainable, low carbon alternatives.
