New Petroleum Mining Permit Boosts NZ Gas Supply and Oil Exports

A new petroleum mining permit will bring additional natural gas to the domestic market over the next decade and generate valuable export earnings from new oil production, Resources Minister Shane Jones says.

Regulator New Zealand Petroleum and Minerals (NZP&M) has today granted Matahio NZ Onshore Limited a 10-year petroleum mining permit in the onshore Taranaki region covering approximately 19 sq km for the Puka field, a small oil and gas field discovered in 2012. Included in the permit area is the promising Oru prospect.

As only the second petroleum mining permit to be granted in the past eight years but one of two granted in the last year or so, this is yet another signal that momentum in New Zealand's petroleum sector is growing, Mr Jones says.

Matahio has estimated that the recoverable reserves from the existing Puka discovery are approximately 170,000 barrels of oil and 1.3 billion cubic feet of gas. An independent assessment of the Oru prospect estimates prospective resources of 1.8 million barrels of oil and 1.2 billion cubic feet of gas.

All gas produced in New Zealand is used domestically by industrial users and as a fuel to generate electricity when renewable energy sources can’t meet demand. The light, high-quality oil produced in Taranaki is sold into international markets and typically refined into petroleum products.

At a time when New Zealand faces ongoing energy security challenges due to our declining gas reserves, every new source helps, Mr Jones says.

Gas will continue to remain critical to our energy mix in the decades to come. It supports electricity generation during periods of low hydro inflows and renewable generation, and it provides energy and feedstock for many businesses that are important to our economy.

The additional oil produced from the Puka Field will generate export revenue, boost royalty revenue and contribute to regional economic activity. All New Zealanders benefit when we responsibly develop our natural resources and convert them into jobs, income and economic growth.

Mr Jones says today’s decision demonstrates opportunities still exist within the Taranaki basin and that responsible development can continue to play an important role alongside investment in renewable and emerging energy technologies.

This permit alone will not solve New Zealand's energy challenges but it is a positive step in the right direction. Together with the growing pipeline of proposed new exploration activity, I’m confident we are moving in the right direction, Mr Jones says.

A resilient energy system requires diversity. That means continuing to invest in renewable energy, supporting emerging technologies, and making sensible use of the natural resources we have. New Zealand needs all of these components working together to deliver affordable, secure and reliable energy for households and businesses.