Stronger push for oil, gas

By CHRIS DANIELS energy writer

Officials charged with running New Zealand's oil and gas exploration business are set to take a more aggressive role and start actively negotiating with foreign companies.

At the conclusion of a three-day petroleum conference in Auckland yesterday, Adam Feeley, group manager of Crown Resources at the Ministry of Economic Development, answered criticism that the Government was not doing enough to encourage overseas companies to explore for energy here.

Feeley said Crown Minerals accepted that New Zealand faced difficulties in attracting oil and gas companies to explore here.

"Publishing glossy colour brochures about the merits of New Zealand to all and sundry will get us nowhere," he said.

"The time has come when we need to vigorously enter into negotiations with targeted parties to either come to New Zealand or to expand their activities here."

The Government had already signalled that it would completely review all incentives offered to energy explorers.

Investment banker Chris Stone, executive director of Wellington firm McDouall Stuart, said New Zealand faced an energy crisis, caused by a failure to secure new energy to replace natural gas from the now depleting Maui gas field. What was "once a challenge, is now a crisis".

He said the Government had not heeded collective warnings of an energy shortage.

"Maui has moved from being a blessing to New Zealand to being a curse," he said.

Stone estimated that potential energy price rises, including the importation of liquefied natural gas, would wipe between $3 billion and $8 billion off New Zealand's annual GDP, a drop of 3-7 per cent.

Many of New Zealand's big industries - dairy, forestry and meat - required large energy inputs.

New Zealand needed to triple its exploration effort.

There was a good discovery rate of gas in New Zealand, and Stone said he was frustrated at the lack of exploration. The Crown needed to change its focus from one of control and regulation to facilitation of investment.