Trusting Taranaki

Regional economic and tourism development agency Venture Taranaki Trust has been high on energy since its inception – instrumental in the growth and prosperity of the region’s oil and gas, and allied sectors.   BY NEIL RITCHIE

The New Plymouth-headquartered organisation, funded by the New Plymouth, Central Taranaki and South Taranaki District Councils and set up in 1998, has always placed a high priority on promoting Taranaki’s strengths –energy, engineering, dairying, and tourism.

Venture Taranaki Trust (VTT) encourages energy in a myriad of ways – from running extensive oil and gas (and engineering) information pages on its website and commissioning reports on energy, to facilitating allied organisations such as the New Zealand Oil and Gas Specialist Technologies Group, and being involved in Inglewood High School’s renewable energy project.

In conjunction with the Ministry for the Environment and local company Eco Innovations, that trust is running a pilot programme aimed at improving the school’s energy conservation through making greater use of renewable energy sources.

The trust also regularly hosts companies thinking of exploring Taranaki or organisations wanting to learn about the region and its energy sector. Among the most recent of these, have been Invercargill’s port company South Port, as well as Southland and Dunedin local authorities, learning how to support explorers already working in onshore Southland and the major consortiums that are planning to spend over $1 billion during the next few years exploring the difficult and distant waters of the Great South Basin. South Port NZ has also joined the oil and gas technologies group.

As well, Venture Taranaki Trust, along with the Engineering Taranaki Consortium and Taranaki Chamber of Commerce, shifted to bigger premises in central New Plymouth late last year – a move it hopes will further develop the synergy necessary to collectively promote the region, its people and businesses, including the energy sector.

As VTT economic development manager Michelle Jordan puts it, the trust offers a ‘one-stop shop’ approach.

“We offer facilitation services and independent advice, signposting business in the right direction and providing any regional intelligence required.

“We are strong on the integrated approach, building relationships and networking, and we play an important role in ensuring Taranaki has the labour and expertise it needs to progress as a region,” she says.

The latest report commissioned by Venture Taranaki Trust finds that the oil and gas sector is a cornerstone of the Taranaki economy.

The 2007 Business and Economic Research (Berl) report – The Economic Impact of the Oil & Gas Sector on the Taranaki Region and New Zealand – says Taranaki’s oil and gas sector directly and indirectly contributes at least $1 billion to the region’s economy and provides the equivalent of almost 3000 fulltime jobs.

Berl says the sector generates 17 percent of the region's gross domestic product (GDP) and contributes to the capability and capacity of several other key industries in the region.

The report calls New Plymouth, “The recognised oil and gas capital of New Zealand” and with the world-class technology, capability and capacity to service the industry nationwide. The city also has the necessary infrastructure, businesses and individual expertise to participate in any oil and gas activities.

"Most, if not all, other regions in New Zealand are simply not geared to provide the required inputs into the oil and gas sector, nor do they have the infrastructure to deal with the outputs from the industry,” says the Berl report.

"It is therefore likely that any future exploration and/or discoveries, regardless of where they occur in New Zealand, will require a significant contribution from Taranaki, be it the port, engineering and construction businesses, dedicated support businesses, individual expertise, or the pipeline infrastructure."

The report says that in the year to March 2006, the Taranaki oil and gas sector employed 817 full-time equivalent positions (FTEs) and generated $741 million. Nationally, the sector employed 904 FTEs and generated $827 million, or about 0.5 percent of national GDP.

However, the full impact of the Taranaki-based petroleum sector is broader than this, considering the number of other industries or service companies that depended wholly or in part on the oil and gas sector.

For example, close to 30 percent of Taranaki computer services output was to the oil and gas sector. For non-building construction, the proportion was 20 percent and for other business services, 19 percent, according to the report.

Applying this multiplier analysis, petroleum contributed a total of $1 billion to the Taranaki economy and employed almost 3000 FTEs. It contributed $1.6 billion to the New Zealand economy and employed over 8600 FTEs.

The report also show that Taranaki oil and gas activity levels have roughly doubled in recent years, with all but one of the 30 wells drilled in New Zealand during 2006 happening in Taranaki, with 23 onshore and six offshore.

Up to 40 wells – exploration, appraisal and development – are due to be drilled between 2007-09 in various parts of the country, mostly in Taranaki, but also in Southland and more the northern West Coast, Canterbury, Northland and the North Island’s East Coast. There are also options for another 10 or so wells to be drilled.

The Petroleum Exploration and Production Association of New Zealand (Pepanz), which also participated in the report, says that with new offshore developments due to come onstream in the next two to three years, the sector is poised to become an even more significant contributor to the Taranaki and national economies.

In addition, Jordan says there’s an understanding of the importance of the energy industry within the Taranaki community, including district and regional government, which makes it easier for the sector to operate in the region.

Industries such as engineering, construction and boat building have developed partly because of the oil and gas sector, which also attracts many international people to the region.

And all future oil and gas activity, whether exploration or production happening in or outside Taranaki, is likely to require significant contributions from, and generate activity for, the region.

“This means Taranaki is rich in service providers, expertise and the resources needed for the oil and gas sector, therefore ensuring it will remain the preferred region for many years to come,” Jordan reiterates.