Resources Minister Shane Jones has opened a fresh contest for the right to search for oil and gas in deep water off Taranaki, the fifth petroleum application to move through the system since the coalition scrapped Labour’s offshore exploration ban.
New Zealand Petroleum and Minerals, the Crown agency that manages the country’s oil, gas and mineral estate, has opened a three-month window around a prospecting permit sought by Taranaki Energy Pty Ltd, a wholly owned subsidiary of the Perth-based company Pancontinental Energy. The proposed permit covers 9,972.5 square kilometres of deep water off the Taranaki coast, a stretch the Government describes as highly prospective but barely explored. No exploration wells have ever been drilled in the area.
Announcing the application, Jones said the country was “seeing renewed momentum in petroleum exploration, with four recent applications from a mix of new and established operators already progressing through competitive processes or under assessment”. He said he welcomed Pancontinental’s interest in New Zealand and in advancing the country’s petroleum potential.
It is worth being clear about what has actually been granted, which is nothing yet. A prospecting permit sits at the very start of the process. The work programme Taranaki Energy has proposed runs for two years and involves reprocessing old two-dimensional seismic survey data, building models of the basin and picking out possible targets that might one day justify drilling. There is no commitment to sink a well, and prospecting is a long way short of pumping gas ashore.
Because the permit sits in an open competitive round, other companies now have until 5pm on 8 October to lodge competing bids. After that, the agency weighs each applicant on its technical and financial strength, its compliance record and the merits of the work it is offering to do. Only then does a permit get awarded.
The wider backdrop is the coalition’s decision, passed into law in the middle of last year through amendments to the Crown Minerals Act, to reverse the ban on new offshore exploration permits that the previous Labour government introduced in 2018. Ministers have argued the ban sent a signal to the industry that New Zealand was closed for business, and that undoing it is central to shoring up energy security as the country’s gas runs down.
And the gas is running down fast. Proven reserves had fallen to about 605 petajoules by the middle of this year, roughly a third of what they were in 2021. That decline has real consequences. The big electricity generators Genesis and Contact have at times had to buy gas from the Methanex methanol plant to keep power stations running, and wholesale gas prices spiked sharply during last year’s winter squeeze. Gas is not only a fuel for heating and industry, it is the backstop the grid leans on when the lakes are low and the wind drops, which makes a shrinking supply a problem for households as much as for factories.
That is the same energy-security worry sitting behind the Government’s recent moves on liquid fuel, including opening the strategic diesel reserve at Marsden Point and rolling out a fuel relief payment, and it is why resources policy has become such a live political fight heading into the election.
Not everyone accepts the diagnosis. Labour and the Green Party have opposed reopening exploration, and climate campaigners including Greenpeace have said the change drags the country backwards at a time when it should be cutting fossil fuel use. Some energy analysts have also made a narrower point, arguing that the 2018 ban did not itself cause the current shortage, because the fields now depleting were always going to decline and the ban only affected new permits rather than existing ones. On that reading, reversing the ban may help confidence and future supply, but it is not a switch that refills the pipes.
The timing question is the one that tends to get lost. Even a genuine discovery in a frontier deepwater block of this kind would take many years, and a great deal of money, to turn into gas at the wellhead. Whatever comes of the Taranaki Energy application, it will do nothing for the reserves problem this winter or next. Its value, if any, is a decade or more out.
What the announcement does show is a Government determined to be seen acting on energy supply, and a small but steady trickle of overseas interest returning to the basin now the legal door is open again. Five applications in under a year is not a rush, and the companies involved are mostly modest players rather than the global majors that once drilled here. But it is more movement than the sector saw in the years the ban was in place.
All of this lands squarely inside an election campaign in which energy, the cost of living and the country’s climate commitments are pulling against one another. Voters heading to the polls on 7 November will be asked, in effect, to choose between two quite different bets on where New Zealand’s power and heat should come from over the next twenty years. If you are still working out where the parties stand on questions like this, our voting tool lays out the main policy positions side by side.
What do you make of the push to reopen oil and gas exploration off Taranaki. Is it sensible insurance against a gas crunch, or money and political capital better spent elsewhere. Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
Leave a Reply