Oil and Gas Potential Game Changer for New Zealand
Petroleum Exploration and Production Association of New Zealand (PEPANZ) Chief Executive Cameron Madgwick told Dunedin business representatives today that a significant oil or gas discovery could be a game changer for the New Zealand economy.
“Every year the Government earns around $600 million royalty and income tax from oil and gas, but this would increase dramatically should exploration activities lead to a significant find. To give this some context, $600 million would fund a major road project, such as the Kapiti expressway, every year,” says Mr Madgwick
“There is genuine international excitement about New Zealand’s petroleum potential. New Zealand is underexplored by world standards, and we are only currently producing from one basin – Taranaki. Geologists agree, however, that New Zealand’s other basins have the potential to have similar deposits of oil and gas as that found in Taranaki.
“Analysis has shown that a find in a single one of our 17 basins could have profound economic benefit. A near-offshore field could mean more than $3 billion of investment, creating 270 jobs in the development phase. A major offshore gas field could mean a massive $19.3 billion of investment.
“Imagine what a fraction of that level of investment could do to some of our regional economies. It would provide new jobs, new career pathways, more income to spend at local businesses and inject new life into some of our regional economies,” says Mr Madgwick.
“To truly understand the impact a significant oil or gas find could have on our country, you only need to look at Norway, which discovered oil off the coast in 1969.
“Norway is now the eighth largest exporter of crude oil in the world. The petroleum sector has powered Norway’s economy for three decades, moving it from a middle-income European country to one of the wealthiest countries in the world.
“Petroleum activities have allowed Norway to build a sovereign fund of around $875 billion ensuring future generations benefit. By comparison New Zealand’s GDP is $173 billion. While it is impossible to say whether we will make discoveries similar to what was found in Norway, we will not know if we do not look.
“We do need to be cautious, but if we successfully found a fraction of what was discovered off the coast of Norway, it would quite simply lead to an economic revolution – dramatically increasing the size of our economy and our living standards.”