New Zealand's oil reserves target met for 2010

New Zealand's oil reserves have been secured for 2010, ensuring the country continues to meet its International Energy Agency (IEA) obligations, Energy and Resources Minister Gerry Brownlee announced today.

Under IEA rules, New Zealand is required to hold 90 days of the previous year's net oil imports.

New Zealand's additional oil reserves have been secured through a global tender. The stocks are held under ‘ticket' contracts, providing the government with an option to purchase petroleum in the event of an IEA-declared emergency.

Mr Brownlee says the country's 90-day oil reserves targets has declined over the past four years as domestic production of crude and condensate has increased.

"Burgeoning production in New Zealand has meant we've had to tender for fewer tonnes of oil each year. With the Maari, Tui and Kupe fields on stream, it's likely currently levels of production will be maintained or increased in coming years.

"We're committed to boosting this country's oil and gas exploration and production."

For 2010, tickets for 100,000 tonnes of crude oil and petroleum have been secured, covering stock held in Japan and the United Kingdom. This is down on 107,000 tonnes in 2009, 285,000 in 2008 and 461,000 in 2007.

"The lower stock holding required with higher domestic production results in a significantly reduced cost to New Zealand - down from over $11 million in 2007 to an expected cost of under $2 million in 2010," says Mr Brownlee.

In total, New Zealand's 90-day obligation for 2010 is 1 million tonnes, similar to 2009 levels. The majority of these reserves are commercial stocks held by companies in the petroleum sector.

The government has bilateral arrangements with the governments of Australia, Japan, the UK and the Netherlands to enable stocks held in those countries to be counted towards New Zealand's IEA obligations. The arrangements require New Zealand to seek approvals for proposed quantities of tickets and include an undertaking by the host government not to impede release of stocks to New Zealand in the event of an emergency.