Govt reveals petroleum exploration plans

Govt reveals petroleum exploration plans

The Government has unveiled its latest petroleum exploration programme. But it faces opposition from environmental groups and is offering the exploration permits at a time when the oil industry is grappling with plunging prices.

Energy Minister Simon Bridges launched the tender for exploration permits at the annual New Zealand Petroleum Conference in Auckland.

The 2016 Block Offer includes four offshore release areas, in the Reinga-Northland Basin, Taranaki Basin, Pegasus and East Coast Basins, and Great South-Canterbury Basin. There is one onshore release area in Taranaki.

The tender will close in September, with the outcome likely be announced in December.

The Chief Executive of the Petroleum Exploration and Production Association says the sector delivers a couple of billion dollars a year to the economy.

Cameron Madgwick told Paul Henry: "For the foreseeable future oil and gas will form a part of our energy mix and so we just need to accept that is the reality and we will need to keep looking for oil and gas."

Several dozen protestors have gathered outside SkyCity Convention centre, where the conference is taking place.

Mr Madgwick says he respects the protesters' right to protest and invited them to meet with delegates from the conference, rather than just protesting outside.

The conference is being held at a time when global oil prices are the lowest they have been in a decade. Crude oil prices fell to as low as US$27 a barrel in early February, but have recovered to US$39.44 on the New York market.

That is well below the monthly peak of US$110 reached in 2012, or the US$133 reached in June 2008.

Mr Madgwick says: "We would much prefer a higher oil price. The industry is still making a difference and still going about its activities at that level. Of course it is constrained, you have to act in a fiscally responsible manner, but we will see the price turn again at some point. It is a commodity, they go through these cycles."

The other challenge for the New Zealand industry is that outside of Taranaki there has been a relatively successful rate for exploration companies.

Mr Madgwick says: "Every time somebody goes through an exploration exercise they gather more data, whether that is through a survey or by drilling a hole. It is only when you have a complete picture of that data that you will have the ultimate success. So even though there have been non-commercial finds, that just builds the data set. Over time there will be a discovery and New Zealand will be pretty well positioned."

The Green Party says the Government should be giving tech companies more support.

Its energy and resources spokesman Gareth Hughes says: "We should be developing our clean technology expertise and exporting it to the world, not subsidising foreign companies to bring last century's technology here and drill for polluting fossil fuels."

The Government says finding gas can be a good thing if it displaces coal.

Newshub.

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