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New Zealand lifts ban on oil and gas production by year-end

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New Zealand lifts ban on oil and gas production by year-end

In 2023, New Zealand’s natural gas production fell by 12.5%. Image credit: hyotographics/Shutterstock.

The New Zealand government plans to pass a law to lift the ban on offshore oil and gas production by the end of the year, reported Reuters.

This development comes against a backdrop of the country facing increasing energy shortages and rising prices.

The aim of this step is to redirect investment into the country’s energy sector, stabilize the national energy supply and relax regulations in favor of the import of liquefied natural gas.

The proposed reversal would open up areas outside the energy-rich Taranaki region onshore for exploration.

Referring to recent severe shortages that have resulted in some of the highest energy prices among developed countries, Prime Minister Christopher Luxon said: “We are responding to a situation that, as I have said, New Zealand should never have faced in the first place.

“It would be the most sensible and true thing to do if they really cared about New Zealand’s energy security.”

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During a press conference, Luxon called for bipartisan support for the bill.

The 2018 ban on offshore exploration permits was initiated under former Prime Minister Jacinda Ardern.

New Zealand’s natural gas production fell by 12.5% ​​in 2023 and a further 27.8% in the first quarter of 2024.

Energy Minister Simeon Brown pointed out that the decline in natural gas production has led to a dependence on coal and diesel to power the grid because renewable energy sources cannot make up the deficit.

“Lake levels are low, the sun isn’t shining, the wind isn’t blowing and our natural gas supply isn’t enough to meet demand,” Brown was quoted as saying.

The Crown Minerals Act Amendment Bill, as the draft law is called, will also allow petroleum activities in certain conservation areas, provided they have minimal impact.

The bill proposes changes to the procedure for awarding oil exploration permits and offers options between a competitive tender and a non-tendering procedure in which time priority applies.

In addition, updates to the requirements for the decommissioning of oil production facilities are proposed to better align them with international standards and to balance regulatory burdens with environmental risks.


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