Flames on a gas stove. Photo: VIKTOR CAP / 123RF
Investors will not be drawn to new gas field developments without broad political consensus, according to one of the country's few oil and gas companies.
It comes as data from the Ministry of Business, Innovation and Employment showed the country's gas reserves were running out faster than previous expectations.
Echelon Resources, formerly New Zealand Oil and Gas, said it supported the government's $200 million plan to co-invest in new gas fields, but called for greater political backing.
Managing director Andrew Jefferies said New Zealand had gas prospectivity, but noted the nature of the industry meant the best wells were drilled first, and as basins matured, new drilling would have to occur in more difficult and more expensive wells.
But he said as not all political parties were in favour of new gas exploration, it made it difficult for investors to commit long-term to ensure a return on investment.
"As soon as you have political parties of any type saying 'well we're going to shut your industry down in the future', you just can't see that runway to invest now, to do the exploration, then to do the development and to produce the gas reserves," Jefferies said.
New offshore oil and gas exploration was banned in 2018 under the Labour-New Zealand First coalition government, but the ban was reversed by the current National-New Zealand First-Act coalition.
Last year, Labour said the reversal sent the country "backwards", while the Greens said the government was "tipping oil and gas onto the climate crisis fire".
Jefferies said from an investment perspective, other countries offered better political consensus on gas.
"In other jurisdictions, we're getting a very clear message that actually there won't be ideology that's driving the decisions as to what's the best fuel. We believe, and investors in the industry believe, that gas will be around for a while."
Jefferies said if new gas fields were not developed, the country may have to start importing gas - which would require huge investment.
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