“Exploration and production activities are at an all time high, with more rigs than ever drilling new wells, new discoveries being made, such as the new find at Radnor near Stratford and a number of new fields being developed for production, including the two big fields of Pohokura and Kupe,” said recently re-elected PEPANZ (formerly PEANZ) chairman Don Morgan.

“Yet all is not well. Domestic self-sufficiency in oil has dropped from 50% in 1986 to only 20% last March.”

In addition, the government was focusing on encouraging new explorers to chase new finds in unproven new areas, and developing the infrastructure that would enable new finds to be quickly brought onstream, Morgan said.

The government was failing to give existing explorers incentives to discover petroleum reserves in known basins and nearer to existing infrastructure.

“PEPANZ believes a more balanced approach would be to extend the incentives for exploration to the whole country, so that existing promising prospects in Taranaki can be exploited as well,” Morgan said.

“Some aspects of the current royalty regime and some of the tax provisions that apply to oil and gas exploration do little to stimulate oil and gas exploration and development, despite recent much-welcomed government initiatives - such as the waiving of the 183-day tax rule for foreign-owned offshore rigs and seismic vessels, and the removal of the previous ring-fencing of exploration expenditure within royalty calculations for new mining permits.

“The government should be doing everything it can to ensure indigenous oil reserves and production are at a level where New Zealand is as close to total self-sufficiency as possible.”

Morgan said the industry look forward to working with new Energy Minister Trevor Mallard, ensuring he was fully informed about energy issues.