Resources Minister Shane Jones said removing the ban on petroleum exploration beyond onshore Taranaki is part of a suite of proposed amendments to the Crown Minerals Act to address the energy security challenges posed by rapidly declining natural gas reserves.
“Natural gas is critical to keeping our lights on and our economy running, especially during peak electricity demand and when generation dips because of more intermittent sources like wind, solar and hydro,” said Jones.
“When the previous government introduced the exploration ban in 2018, it not only halted the exploration needed to identify new sources, but it also shrank investment in further development of our known gas fields, which sustain our current use levels.
Rebuilding investor confidence in New Zealand’s petroleum sector will require more than removing the ban. The Coalition Government has proposed further changes, as agreed by the Cabinet, to re-establish New Zealand as an attractive and secure destination for international investment.
“Some of our current settings are a barrier to attracting investment in exploration and production because they are overly costly and onerous on industry. Some obligations lack flexibility and compliance obligations are uncertain and unclear.”
In addition to removing the ban, changes have been proposed on how petroleum exploration applications are tendered and allocated, aligning the petroleum decommissioning regime with international best practices and improving regulatory efficiency.
NZ petroleum and minerals sectors contributed $1.9 billion to GDP in 2020-21 and $236 million in Crown revenue in 2022-23. In 2023, mining employed around 6,000 people, most based in regional communities.
“I want a considered discussion about how we use our natural resources to improve the security and affordability of energy and resources supplies, stimulate regional economic development opportunities, and increase New Zealand’s self-sufficiency to protect against volatile international markets.”
The Crown Minerals Amendment Bill will be the latest legislative reform introduced by the government to cut red tape, enabling crucial resources and infrastructure projects across New Zealand and allowing communities to benefit. The Bill will be introduced to Parliament in the second half of 2024.
