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NZ govt ends new offshore oil and gas exploration

Thursday 12th April 2018

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The New Zealand government will issue no new exploration permits for offshore oil and gas fields in a historic move to support its commitment to action on climate change.

While some 22 existing offshore oil and gas exploration permits remain in place, with rights to explore and potentially develop any commercial discovery unaffected, the decision signals the endgame for decades of attempts to find major new oil and gas deposits outside the Taranaki Basin, where the offshore Maui, Kupe, Maari, Pohokura, and Tui fields are all producing oil and gas today.

"The coalition government is taking an important step to address climate change and create a clean, green and sustainable future for New Zealand,"  said Prime Minister Jacinda Ardern in a statement issued at 5am in coordination with other Ministers and environmental groups. 

Greenpeace and the Royal New Zealand Forest and Bird Protection Society both hailed the move. 

The decision was " a huge win for our climate and people power," said Greenpeace director and former Green Party leader Russel Norman. "The tide has turned irreversibly against Big Oil in New Zealand."

While the government will again hold a Block Offer tender process for oil and gas exploration permits this year, it will only offer acreage onshore in the Taranaki region.

The announcements come just weeks after global oil giant Shell sold its last remaining oil and gas permits and producing assets in New Zealand to Austrian oil and gas company, OMV, and ending more than a century of activity in New Zealand.

Under the Block Offer system introduced by the previous government in 2012, onshore exploration licences were also offered and granted in other parts of the country, although none had yet led to a commercial oil and gas find.

Ardern stressed the decision had no impact on existing exploration and mining permit holders' property rights.

"We are protecting existing exploration and mining rights. No current jobs will be affected by this as we are honouring all agreements with current permit holders. We are providing certainty for communities and industry ... with a managed transition"  away from the production of fossil fuels.

"There are 31 oil and gas exploration permits currently active, 22 are offshore. These permits cover an area of 100,000 square kilometres ... and run out as far as 2030 and go an additional 40 years under a mining permit." 

These include deepwater prospects off the coast of Canterbury and Otago, including the Great South Basin, where exploration has occurred off and on since the 1960s in search for a massive oil and gas field that geological information suggests is probably there, but has never been found.

Regional Economic Development Minister Shane Jones last week announced a package of measures for the Taranaki region from the government's Provincial Growth Fund, in a move that can now be seen as having laid the groundwork for today's announcement, including support for turning Taranaki into a model province for " clean energy"  production.

New Zealand First's support for the move was conditional on protection for existing oil and gas rights holders, said Jones.

"With 10 years' worth of natural gas consented, plus potentially billions of dollars of natural gas reserves permitted but yet to be consented, we can ensure economic returns and security of supply," he said. "This just transition will not happen overnight, so there is no need for scaremongering and while it will undoubtedly pose challenges, it also provides opportunity through investment in new technology and new industries." 


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