New Zealand to ban future offshore oil and gas exploration

New Zealand will grant no further offshore oil and gas exploration permits, according to Jacinda Ardern, New Zealand’s prime minister. Speaking last week Ardern said that “we must take this step as part of our package of measures to tackle climate change.”

Environmental campaigners called the move a major blow to ‘Big Oil’.

France, Belize and Costa Rica have already announced bans on either fossil fuel exploration or production, although these are largely symbolic as none are major oil producers. However, the policy shift announced by Labour party leader Ms Ardern marks a change in direction for New Zealand, which under the previous conservative government prioritized fossil fuel exploration to help the economy grow.

During the past decade Shell, Chevron, Statoil and other resources companies have sought to search for oil and gas in waters off the coast of New Zealand, which has the world’s fourth largest maritime exclusive economic zone.

The opposition National Party said the decision constituted “economic vandalism”.

The oil lobby said it was disappointed at the “surprise” decision, which it claimed was taken without consultation with the industry.

Cameron Madgwick, CEO of the Petroleum Exploration & Production Association of New Zealand (PEPANZ) said that “huge investments have been made by companies already anticipating offshore block offers which have now gone to waste and people’s jobs will be affected,” adding that “it sends a worrying message to domestic and international investors on how open New Zealand is as a place to invest and create jobs.”

There are currently 31 active oil and gas exploration permits in New Zealand, 22 of which are offshore. These existing exploration and mining rights are protected under the policy change, which the government said would not affect current jobs. Ms Ardern told reporters future oil and gas exploration would now be limited to onshore acreage in the oil-rich Taranaki region.

New Zealand is a relatively small oil and gas producer in global terms, extracting most of its production from the five offshore fields of Maui, Pohokura, Kupe, Maari and Tui. It produces about 15m barrels of oil and 175bn cubic feet of gas per year, and the contributing about NZ$2.5bn (US$1.8bn) to the local economy.

Angus Rodger, research director at Wood Mackenzie, called the New Zealand decision a “bold step”, abandoning the tax revenues and jobs of the oil and gas industry.