Gas crisis: Todd proposes job cuts as Government moves to overturn the oil and gas ban

Associate Energy Minister Shane Jones called on energy companies to drill. Photo / Mark Mitchell

The Government’s attempt to revive oil and gas exploration has hit another snag with Todd, one of New Zealand’s largest energy companies, confirming today it has plans to shed jobs. The announcement came on the day legislation to repeal the offshore oil and gas ban was introduced to Parliament.

Todd’s fields are mainly onshore. Todd Energy, a subsidiary, owns 26% of the offshore Pohokura field, which is operated by OMV NZ, which has the majority stake. However, the job losses, which the company partly blamed on declining gas reserves, suggest overturning the ban would not automatically lead to large amounts of new oil and gas being unlocked.

A Todd spokeswoman told the Herald it was “reviewing its operations with a focus on simplification and efficiency”.

“Our refocus on New Zealand, coupled with declining gas reserves, means that Todd is adopting a simplified structure. Unfortunately, this will also result in a reduction of jobs.

“Business decisions that adversely affect our employees are never easy, especially given the challenging economic environment. Todd is committed to supporting our affected employees throughout this process.”

The energy sector faces many challenges: declining reserves, years without significant new finds, and the fear the next Labour-led Government would ban exploration again, which is stifling investment.

Associate Energy Minister Shane Jones said he had been encouraging Todd to “put some drills in the earth and get some more gas”.

“There’s rumours swirling around about their economic strength and whatnot, but that’s why we need to reverse the oil and gas ban and attract investment into the industry.”

Labour’s energy spokeswoman Megan Woods, who oversaw the offshore exploration ban as minister said: “The fact of the matter is we have not had commercial find in New Zealand for some time”.

She noted a regulatory impact statement for the ban said exploration activity in New Zealand had been declining since 2014, before the 2018 ban on new petroleum exploration outside onshore Taranaki.

“This is consistent with global trends in upstream oil and gas investment, which peaked in 2014 when the oil price crashed, and has not recovered to the same levels as oil and gas firms and traditional lenders navigate the energy transition and pursue lower-cost reserves and development options,” the regulatory impact statement said.

Woods attacked the idea that overturning the ban would lead to a solution to the energy crisis.

“We are seeing a whole lot of political sloganeering and right-wing virtue signalling,” she said.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.