Government keen to tap rich oil reserves

The Government is keen to roll out the welcome mat to foreign oil explorers as new estimates show the country could be sitting on $60 billion of black gold.

Energy and Resources Minister Gerry Brownlee yesterday said the amount of untapped oil and gas off the New Zealand coast was now thought to be worth around $30 billion a year in export receipts by 2025.

Brownlee said the tax receipts from the gushers would amount to around $10b a year for the government - enough to wipe out the current cash deficit.

The data is in a series of reports released by the Government yesterday. Chief among them is a survey of the country's oil and gas reserves by GNS Science, which says there could be as many as 6.5 billion barrels of undiscovered oil undersea in 10 areas off the New Zealand coast, stretching from the Great South Basin to Cape Reinga.

At current market value, that is worth around $67 billion.

The size of the oil fields would dwarf anything previously discovered in New Zealand. The Maui and Tui fields, whose output last year made oil the country's third-largest export earner, hold about 150 million barrels.

GNS also believes there could be around 40 trillion cubic feet of natural gas in the same 10 areas. The most lucrative areas are thought to be the Great South Basin, deepwater Taranaki, and Canterbury.

Another report to the Government by private sector analyst McDouall Stuart recommends setting up a National Oil Company owned by the Crown to manage the potentially enormous resource.

Other options suggested include the Crown underwriting of oil drilling equipment and infrastructure, directing state-owned energy companies such as Genesis or Solid Energy into oil exploration and requiring the Superannuation Fund or ACC to invest in oil futures.

Brownlee yesterday said it was too early for any decisions on how the Government would proceed. He also said the Government was reconsidering the tax and regulatory framework of the petroleum sector to make investment from foreign oil explorers more attractive. Fairfax

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