New Zealand to lift oil, gas exploration ban amid energy security concerns

New Zealand plans to remove its ban on offshore oil and gas exploration to address energy security challenges posed by rapidly declining natural gas reserves, resources minister Shane Jones said on June 9.

The amendments to the Crown Minerals Act would end the ban, in place since 2018, on exploration outside the onshore Taranaki Basin.

“Natural gas is critical to keeping our lights on and our economy running, especially during peak electricity demand and when generation dips because of more intermittent sources like wind, solar, and hydro,” Jones said.

“When the exploration ban was introduced by the previous government in 2018, it not only halted the exploration needed to identify new sources, but it also shrank investment in further development of our known gas fields, which sustain our current levels of use,” he added. “Without this investment, we are now in a situation where our annual natural gas production is expected to peak this year and undergo a sustained decline, meaning we have a security of supply issue barrelling towards us.”

Jones said that the government is proposing further changes, agreed upon by the cabinet, to re-establish New Zealand as an attractive destination for international investment.

“As well as removing the ban, we are proposing changes to the way petroleum exploration applications are tendered and allocated, aligning the petroleum decommissioning regime with international best practices, and improving regulatory efficiency,” the minister said.

The Crown Minerals Amendment Bill will be introduced to parliament in the second half of 2024.