April 2019

Focus turns to South Island opportunities

The potential of natural gas discoveries in the lower South Island has been highlighted this month.

PEPANZ has welcomed an application to the Environmental Protection Authority (EPA) by OMV for activity off the Otago Coast as a required step towards potential exploration work.

Also this month New Zealand Oil & Gas has been granted a three year extension on their drilling programme for the Barque prospect near Oamaru.

“While there is no guarantee, a discovery of natural gas would be a massive economic boost for Otago and New Zealand as a whole," said PEPANZ CEO Cameron Madgwick.

"Taranaki has benefitted enormously from a safe, successful and sustainable energy industry over the last 50 years. There is the same exciting potential for other regions too."

Predictably, these moves have been criticised by Greenpeace and the Green Party who have warned "expect resistance".

Select Committee hears tax concerns

PEPANZ has submitted to the Finance and Expenditure Select Committee on the importance of renewing a tax exemption for offshore exploration and development.

Without this provision, an artificial incentive is created for vessels and rigs to leave New Zealand and be replaced before the threshold of 183 days expires. It would be expensive and time consuming, and worse for the environment through increased transport emissions.

We received well-informed questions and positive feedback from the committee and are hopeful of a good outcome when the bill amending the Income Tax Act comes before Parliament shortly. 

“The line-up for the Just Transition Summit in New Plymouth doesn’t have a lot of representation from our sector, which is a little bit surprising," said PEPANZ CEO Cameron Madgwick in an interview with the NBR.

“What we’d like to see is some support for tangible steps to move toward lower emissions such as, for example, enabling legislation on carbon capture and sequestration. That’d be a good thing to talk about at a conference about lowering emissions.

“We believe there is a low emissions future that involves our industry. We continue to be open to a dialogue with the government to see if we can get some of those things."

Global news roundup

It's been a busy month of global industry news - here are some stories you may have missed:

• An enormous natural gas find has been reported by Santos in the north West Shelf of Western Australia. Analysts say the discovery may hold 2.5 trillion cubic feet of gas and 25 million barrels of condensates.
• A battle is brewing for ownership of Anadarko. Last week Chevron announced an offer of $33 billion USD, but in recent days Occidental Petroleum has announced a 20% higher offer. 
• Royal Dutch Shell is resigning from a US industry association because it disagrees with the group's climate change policies. The exit from the American Fuel and Petrochemical Manufacturers follows a review by Shell of 19 major industry groups it belongs to.