Minister welcomes oil and gas report

Energy and Resources Minister Gerry Brownlee today welcomed a report commissioned by Venture Taranaki on the value of the oil and gas industry to New Zealand and the Taranaki region.

Mr Brownlee says the report, titled ‘The Wealth Beneath Our Feet,’ highlights the significant contribution of the oil and gas sector to the New Zealand economy.

The report finds that at a minimum, the oil and gas industry directly employs 3,730 full time equivalents (FTEs), and contributes $1.9 billion to the New Zealand economy. Adding indirect effects, employment increases to 7,700 FTEs and the contribution to GDP increases to $2.5 billion.

“Very few New Zealanders would know that oil was New Zealand’s third largest export earner in 2008 and fourth largest in 2009,” Mr Brownlee said.

And while the oil and gas sector employs fewer than half as many people as the dairy industry in Taranaki, it contributes almost 2.5 times more to regional GDP. This is largely due to the industry's capital intensity, which results in high labour productivity of over $525,000 a year per FTE.

Mr Brownlee says the report demonstrates why the government is committed to the responsible development of New Zealand's petroleum resources.

New Zealand has the fourth largest exclusive economic zone in the world with 15 recognised basins which are potentially capable of producing hydrocarbons, yet only the Taranaki basin currently has producing fields.

The government’s Petroleum Action Plan includes a series of workstreams designed to make New Zealand a highly attractive destination for international exploration and production investment, including:

• a review of the Crown Minerals Act;
• development of an integrated knowledge investment strategy; and
• developing a pathway for realising the potential of New Zealand’s methane hydrates endowment.

In October the government announced the expansion of the Crown Minerals Unit in the Ministry of Economic Development.

“Crown Minerals will have a much more commercial and strategic approach that better meets the needs of both the industry and government,” Mr Brownlee said.

“The petroleum estate is one of the most valuable assets in the Crown's portfolio and it is important it is well managed.”

The Crown received $450 million in royalties from petroleum in the 2009/10 financial year, and $540 million in 2008/9.