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The country has good potential for further significant oil and gas discoveries, despite negative implications generated by the Government’s wider policy programme, says the head of the country’s largest listed explorer. By Neil Ritchie.
Speaking at the 2010 New Zealand Petroleum Conference in Auckland, he took the opportunity to take a pot shot at the Government and aspects of the its wider policy programme that have “serious negative implications”. He specifically pointed to the Emissions Trading Scheme and the way it is being implemented, and the review of the Foreshore and Seabed Act, which he called “scare factors” to future exploration. The Petroleum Exploration and Production Association of New Zealand (Pepanz) estimates the emissions scheme adds about 70 cents per Gigajoule to the price of gas paid by producers who are unable to pass on the costs. Some long-term gas supply contracts do not have the ability to include such things as carbon charges. At worst, Salisbury says, the emission trading regime is a “substantial new tax”. At best, it will lead to difficult commercial negotiations and even litigation between industry players. On the positive side, Salisbury is pleased the Government’s pro-resource development projects promoting the country as a highly attractive exploration destination, which a contrast to the “more insular thinking” of the last Labour-led Parliament. Salisbury likened world oil and gas explorers to global tourists “seeking rewarding locations to visit and, possibly, stay”. New Zealand’s tourism sector understood the country’s very small role in the global tourism industry and, realising that it operated in a highly competitive environment, promoted “Destination New Zealand” as a whole package to overseas travellers, he told delegates. Similarly, the energy industry needed to market itself globally, promoting its own “Destination New Zealand”. Salisbury says most explorers would go to the “must see” destinations, that is, regions with proven petroleum systems, production, and good remaining resource potential. In New Zealand this essentially means only Taranaki, with its “attractive but relatively sparse pleasures”. The other Kiwi experience for oil and gas tourists is the “largely unspoiled landscape” that offers a lot of adventure and potential for the intrepid explorer – financially and technologically fit – looking for extraordinary prizes. “Travelling to remote destinations is promising, it is also daunting, and not without a great deal of risk,” he adds.
Energy NZ Vol.4 No.6 November-December 2010 |
David Salisbury, New Zealand Oil and Gas managing director, says there are “excellent opportunities” for companies the size of NZOG and the government’s recognition of the sector is, “an economic growth engine and its Petroleum Action Plan are very welcome initiatives.”