The importance of oil and gas to the New Zealand economy
The upstream oil and gas sector contributes over $2.5 billion to New Zealand’s Gross Domestic Product (GDP), the Government collects approximately $500 million in royalties and income tax from the sector annually, and oil exports are worth approximately $1.5 billion per annum.
Offshore oil and gas is the largest contributor to New Zealand’s marine economy, representing 48 percent of the marine economy in 2013. Offshore oil and gas contribute more to New Zealand’s GDP than shipping, fisheries and aquaculture combined.
The industry generates over 11,000 jobs nationally, and many of these jobs are highly skilled and specialised. Oil and gas workers earn twice the national average salary and create seven times the average value earned per annum, money that is spent in local communities.
Gas is also an essential feedstock for many industrial activities, such as methanol production and urea fertiliser for agriculture, industries that wouldn’t exist without a ready supply of natural gas.
Gas also supports a range of economic activities that require heat, such as furnaces, milk drying, timber processing and steel production.
New Zealand’s oil and gas production is concentrated in Taranaki. The contribution the sector has made to that region has been immense – accounting for 30 percent of Taranaki’s GDP and two percent of regional employment.
Oil and gas is one of the key reasons Taranaki has the highest regional GDP per person in New Zealand, at over $71,297, compared to a national average of $54,178.