CALGARY — When it comes to attracting oil and gas investment, New Zealand offers regulatory stability, an educated workforce and plenty of mainly offshore exploration opportunities.
But the battle for global resource investment dollars isn’t getting any easier, New Zealand Energy Minister Simon Bridges conceded Friday.
“Resource dollars are scarce but that’s not to say they aren’t there for projects with the right fit,” he said.
“We’re in a position where we struggle for relevance because we’re small, we are at the bottom of the world, but astute players, particularly with a profile of high appetite for exploration and first-mover example, are investing significantly.”
New Zealand’s mean oil production rate was 40,300 barrels per day in 2012, according to a government website, down from peak production of 58,600 bpd in 2008. Canadian oil production in 2012 was about 3.2 million bpd.
Bridges spoke with the Herald just before boarding a flight back to New Zealand after a two-week tour through Norway, the United States and Canada.
In Ottawa, he met with Natural Resources Minister Joe Oliver and, in Toronto, he attended the Prospectors and Developers Association of Canada conference.
In Calgary, his delegation met with provincial government, financial and academic representatives over two days.
Resource development issues are similar in New Zealand and Canada, he said, and include resolving native claims and dealing with groups concerned about direct environmental damage plus global warming from any use of fossil fuels.
There are only a few Canadian explorers operating in New Zealand, such TAG Oil Ltd. and New Zealand Energy Corp., both based in Vancouver. On its website, TAG claims to be the most active exploration and development company in the country.
New Zealand is a net importer of energy, although it does export some oil, but Bridges said his department’s goal is more about creating skilled jobs and boosting gross domestic product than reaching energy self-sufficiency.
He said New Zealand’s royalty regime is deliberately simple — 42 per cent on profits after capital recovery — a number he agreed likely doesn’t beat Alberta’s lower royalty and tax levies.
“The model is one where we don’t provide incentives at the front end of exploration,” Bridges pointed out.
“We expect the companies to go out and do it.”
All of New Zealand’s producing fields, on shore and offshore, are in the Taranaki Basin, on the west coast of the North Island, although it has 17 other basins expected to contain oil and gas. Almost all exports go to Australia.
dhealing@calgaryherald.com