Oil companies may have to get as much as $1.2 billion of insurance cover for offshore spills under a new Government proposal.
Associate Transport Minister Julie Anne Genter on Thursday announced Cabinet had agreed to consult on increasing the amount of cover oil and gas operators are required to hold.
Currently companies had to insure for about $27 million, but the new proposal would see them pay more based on their risk, up to a cap of $1.2 billion, Genter said in a statement.
"Communities and taxpayers shouldn't be left to foot the bill for clean-up of an oil spill, like we saw with the Rena," she said.
"It's only fair that operators are able to cover the clean-up cost of a worst-case scenario oil spill."
But current operators would not need cover anywhere near the cap, which had been set in case new operations began in higher-risk, deep-sea locations.
"I understand that the amount of insurance or financial insurance estimate for current production installations in Taranaki ranges from about $170 million to $360 million," Genter said.
A spokesman for her office said the Government was aiming to have the changes in place by the end of the year, after consulting.
Meanwhile, it will also look at changing the Maritime Transport Act 1994 to clarify rules around insurance.
"Under the existing Act owners of offshore oil and gas installations face unlimited liability for the cost of pollution damage and clean-up resulting from a spill from their facilities in New Zealand waters. The Amendment Bill does not change their unlimited liability," Genter said.