Offshore oil and gas explorers will have their tax breaks extended for another five years.
The exemption from tax on the profits of non-resident operators of offshore rigs and seismic vessels was introduced in 2004 and was due to expire on December 31 this year.
Energy Minister Gerry Brownlee and
Revenue Minister Peter Dunne said in a joint statement the extension was to build on growing interest in exploring off New Zealand.
"The past five years have seen more exploration activity in New Zealand waters," the ministers said.
The number of non-resident offshore rigs has more than doubled, the number of offshore wells drilled has increased from 12 wells in the period between 2000 to 2005 to 62 wells in the period since 2006.
As part of a wider push to encourage exploration, Brownlee last week announced a $20 million injection into government-funded seismic data acquisition.
Before the exemption was introduced five years ago, non-resident offshore rig operators and seismic vessels tended to stay in New Zealand for a period of less than 183 days when this country's tax rates would kick in.
Different rigs were then required to be brought to New Zealand to complete the work, pushing up costs of what was already expensive work.
Straterra, the industry group representing New Zealand's natural resources industries, welcomed the move yesterday.
Chief executive Richard Michael said the success of the Tui field and the Maari field had stimulated interest in New Zealand, which needed to be taken advantage of.
"It's certainly about trying to let the international community know the Government is keen on getting explorers down here," he said.
