Oil, gas and mining sector powering economy

Last updated 05:00 04/09/2013

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The oil, gas and mining sector is the most productive sector in the economy, with workers earning an average of $105,000 a year and generating $333 for each hour worked, a government report shows.

The report, issued last night, shows that jobs in the sector doubled in the past decade. That was despite hundreds of coalmining jobs being lost in the past couple of years.

Economic Development Minister Steven Joyce said oil and mineral exports, excluding coal, were worth $2.8 billion last year.

"If we want more and better-paying jobs and more money to invest in our schools and hospitals, then we need to keep making the most of our abundant energy and minerals potential through environmentally responsible development," Joyce said.

The summer ahead will be one of the largest on record for oil and gas exploration, with 13 exploration wells to be drilled offshore and 27 onshore.

Energy Minister Simon Bridges said the industry was expected to spend $600 million to $755m.

But Green Party mining spokeswoman Catherine Delahunty said the report showed the "Government's fossil fuel agenda has failed".

Mining employed just 6000 people, compared with nearly 200,000 in manufacturing.

The report also showed exports of coal and oil were declining and stated that "most of the easily mined resources [of coal and gold] in New Zealand are close to exhausted" and "increasingly unprofitable".

The report failed to account for the environmental and economic cost of polluting the climate with more fossil fuels, Delahunty said.

However, the government report shows the petroleum and minerals sector, including gold, coal and aggregates, generates $333 an hour worked based on the GDP for the sector divided by the number of hours paid. That compares with the average of just $48 for each hour worked.

And workers are paid on average $105,000 a year - more than twice the New Zealand average.

The productivity reflects the high returns when oil and gas explorers hit big fields, although exploration and development is also expensive and many exploration wells are commercial duds.

The Petroleum and Minerals Sector Report shows that in the past six years there has been a big lift in oil and gas exploration and development, worth a total of $8.3b.

The Crown took in levies and royalties worth $380m last year alone, taking the total to $1.9b in six years.

But the coal sector has been cutting jobs heavily. Falling coal prices and New Zealand's high dollar mean it is currently cheaper to import coal.

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- BusinessDay

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