Case studies show potential for growth of Dunedin

Dunedin has the potential to be a key hub if oil exploration does go ahead on the east coast of New Zealand, according to School of Business researcher, Dr James Henry.

At a BNZ Business Seminar tonight, Dr Henry compared Dunedin with two prosperous oil industry supply-bases – Stavenger in Norway and Aberdeen in Scotland - and found that Dunedin has almost identical attributes to these major oil industry hubs.

These include close proximity to a major deepwater port at Port Chalmers, the capability of handling multiple ships at Dunedin wharves, including enough harbour basin land from which to base a supply hub, an established engineering base and an airport fully capable of catering to oil industry transport needs. Dunedin also has the infrastructure, recreational facilities and accommodation/restaurant services which make it attractive for oil industry staff.

“Wharves at Dunedin would require upgrading, but apart from this Dunedin is a logical place because it has everything the oil industry needs,” Dr Henry says.

He presented his research, conducted while on study leave to Norway and Scotland in 2008, to an audience of about 100 who came to hear him speak at the seminar.

His projections are based on case studies of four cities which had similar characteristics to Dunedin, including similar-sized populations and status as tertiary education centres.

Stavenger and Aberdeen have embraced the oil industry and become major supply bases with healthy employment, as compared with Dundee, which had not attracted oil business, and consequently had failed to prosper.

Between 1970 and 1980 the city of Stavenger adopted a proactive and dynamic approach to attracting new industry, which by 2008 had resulted in development of an oil supply base, low unemployment, above average household income and rapid population growth. The city has also built a new university.

Aberdeen had also been hungry for new industry between 1970 and 1980, and the oil base there had contributed to new business ventures which led to improved employment opportunities, above average household income, strong population growth and an increased university population. By contrast, Dundee had experienced high unemployment, population decline and social deprivation.

“When you compare Dunedin with Stavenger and Aberdeen, the similarities are almost uncanny in terms of layout and harbour facilities. You can see how comfortably an oil base could be accommodated in Dunedin.

“The city has to be proactive because there are massive benefits, and at least 3000 jobs which Dunedin could gain from this development.” Dr Henry says.

The city has already created a promotional booklet and DVD to promote how well Dunedin could serve the oil industry. The material has been developed jointly by the Dunedin City Council, Port Otago, Dunedin International Airport, Engineering Dunedin and the University of Otago.

Dr Henry believes the oil exploration companies will announce later this year where exploration will take place, following several years of seismic surveying and oil exploration in the area extending from Banks Peninsula to Stewart Island.