The government of New Zealand is planning to lift a ban on offshore petroleum exploration, citing energy security challenges from rapidly declining natural gas reserves.
According to a government statement, the government’s proposed amendments to the Crown Minerals Act, which include removing the ban on petroleum exploration beyond onshore Taranaki, are expected to usher in a new era of energy security and prosperity for the energy sector.
Shane Jones, the country’s resources minister, said, “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.”
The previous government introduced an exploration ban in 2018. In addition to halting the exploration needed to identify new sources, it shrank investment in further developing New Zealand’s known gas fields.
Shane Jones added, “Without this investment, we are now in a situation where our annual natural gas production is expected to peak this year and undergo a sustained decline, meaning we have a security of supply issue barreling towards us.”
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The press release adds that some of New Zealand’s current settings are a barrier to attracting investment in exploration and production because they are overly costly and inconvenient for the industry.
The minister added, “In addition to removing the ban, we are proposing changes to how petroleum exploration applications are tendered and allocated, aligning the petroleum decommissioning regime with international best practices, and improving regulatory efficiency.”
The Crown Minerals Amendment Bill will be introduced to the New Zealand Parliament in the second half of 2024.