Although Associate Energy Minister Harry Duynhoven, in making the Government's announcement, recognises that more gas needs to be found to fuel current gas fired base load power stations and peaking plants in times of demand, the block offer may prove unattractive for explorers to submit aggressive work programs.
Security of revenue is required to underwrite any major oil and gas development, and with the Government’s recent decision to minimise the role of oil and gas in New Zealand’s future “energyscape”, the prospect of securing that security of revenue is likewise minimised.
The Government cannot have it both ways.
*Bryan Gundersen is a partner in New Zealand law firm Kensington Swan. He specialises in energy & resources and heads the National Energy Team.