Talk to us, oil and gas industry tells Government

The oil and gas industry says the Government did not consult it directly before its announcement an end to offshore block offers. Photo / Mark Mitchell

The petroleum industry is calling for urgent talks with the Government over its announcement to end all future offshore oil and gas exploration, saying the industry was not consulted.

"We are disappointed there has been no direct consultation with the industry and it is also a surprise given the Labour Party's 2017 energy manifesto talked of continuing offshore exploration," said Cameron Madgwick, chief executive of the Petroleum Exploration and Production Association of New Zealand (Pepanz).

"Huge investments have been made by companies already anticipating offshore block offers which have now gone to waste and people's jobs will likely be affected. It sends a worrying message to domestic and international investors on how open New Zealand as a place to invest and create jobs.

"We ask the Government to talk with the industry urgently. In the meantime, we will be carefully considering the ramifications of this decision and our options going forward," Madgwick said.

Prime Minister Jacinda Ardern said today she would be surprised if the industry considered itself blindsided by the announcement.

"We flagged both our interest as a party and as a Government towards moving away from fossil fuels. We've always talked about a just transition and the need for a lead time. We knew very clearly what the industry's view was."

Madgwick said the announcement would do nothing to reduce global greenhouse gas emissions and could make them worse.

"Because petroleum is produced to meet growing global demand, not exploring and producing in New Zealand simply means other countries will produce it instead and we will have to import it at higher cost.

Natural gas and oil provided more than half of New Zealand's energy and were crucial to households, businesses, schools and hospitals.

"While other sources of energy are being developed there is no realistic way they can cover this demand in the immediate future. We are already seeing the potential impact this week with coal being used for electricity generation to ensure security of supply following the interrupted gas supply from Taranaki," Madgwick said.

New Zealand would also miss out on substantial economic benefits from potential new developments.

The Government received around $500 million a year in taxes and royalties from the sector and employed over 11,000 people at peak times, he said.

New Plymouth Mayor Neil Holdom described today's announcement as a "kick in the guts".

"I have described it as a kick in the guts because we really wanted to have the discussion and develop a plan before we came out with material policy changes which signal to the oil and gas businesses that they don't have a long-term future in Taranaki," Holdom told RNZ this morning.

"We need a plan and we need to create some certainty because we have 4000 directly employed people in Taranaki working in the sector and another 3000 to 3500 in related industries, so that's 7500 households."

"We've got industry participants making long-term decisions based on a long-term outlook.

"We would have liked to develop a plan before hearing this news because it will create significant stress and anxiety in many of our households."

Ardern said she had spoken to both mayors in the region before the announcement was made and other ministers and MPs had been in touch with other groups such as the Chamber of Commerce and local iwi.

"I am absolutely committed to visiting to Taranaki and talking to those industries affected and those who will see the potential of this announcement as well," she said.