New Zealand's oil and gas sector has become a far less attractive prospect for investment, according to some of the world's top energy executives.
An annual survey of the world's leading oil executives, which ranks the ease of investment into oil and gas producing countries, shows New Zealand has dramatically dropped down the list in terms of its attractiveness to investors.
The Opposition was not surprised with the report's findings, saying it confirmed what many already knew – but the Government was undeterred and remains "incredibly proud" of its oil and gas policies.
The Fraser Institute, which has run the survey every year for 12 years, asks executives to rank provinces, states and countries according to the extent to which barriers to investment in oil and gas exploration and production are present.
New Zealand's attractiveness to investors has dropped from the 14th highest country/region to 46 in the space of a year.
"This drop is based on poorer scores with respect to political stability, environmental regulations and protected areas and taxation in general," the report said.
National's Energy spokesman Jonathan Young put the blame for the drop squarely in the lap of the Government.
In April, Prime Minister Jacinda Ardern banned future offshore oil and gas exploration in New Zealand with the exception of Taranaki.
The ban took the industry by surprise because it was not part of any confidence and supply or coalition agreement and had not been explicitly promised by Labour during the election campaign.
According to some industry players surveyed in the Fraser Institute report, this was a key reason for the drop in New Zealand's attractiveness.
"New Zealand's move to ban new offshore exploration is a deterrent for investors," one said.
"Jurisdictions that are openly hostile towards resource development, like New Zealand, cause investors to take their investment dollars elsewhere," said another.
Young was not surprised by this and said the ban had "scared off" potential investors and would cost the economy tens of millions of dollars.
In fact, a Ministry of Business, Innovation and Employment (MBIE) regulatory impact statement revealed the estimated cost of the ban would be $7.9 billion between 2027 and 2050.
"We have been hearing that New Zealand has been black listed as an investment destination," Young said.
ACT leader David Seymour said the survey shows the Government had "trashed New Zealand's reputation as a destination for investment with its reckless oil and gas ban.
"We already have the toughest restrictions on foreign direct investment in the developed world, according to the OECD. New Zealand is now seen as a hostile destination for investment."
But Energy Minister Megan Woods stands by the Government's decision.
"We're incredibly proud of the fact that New Zealand is leading the world on a managed, long term transition to a clean energy future."
She noted that the Government was protecting all of the 100,000 square kilometres of acreage that's already been permitted – an area nearly the size of the North Island.
"Not only that, but exploration is still possible on the onshore Taranaki basin. In fact, consultation with iwi and hapū on the area proposed for Block Offer 2018 is currently under way.
"International investors will consider a range of information when making decisions about where to invest, including the likelihood of a discovery and the likely value of any potential discovery."
Climate Change Minister James Shaw said he was unsurprised by the survey's results.
He said because oil and gas exploration was being phased out in New Zealand, there was not actually much more investment in the sector that was needed.
"So it's unsurprising that investors in that industry would be saying that over the long term it's not a place they wanted to end up."
A total of 256 respondents participated in the Fraser Institute survey this year, providing sufficient data to evaluate 80 jurisdictions that hold 53 per cent of proved global oil and gas reserves and account for 68 per cent of global oil and gas production.