New Zealand has significant natural energy resources, with healthy reserves of coal, natural gas and oil / condensate, extensive geothermal fields and a geography and climate which have supported substantial hydroelectric and wind power development. The main minerals mined, in addition to coal, are gold, silver, quartz, iron sands, various other industrial minerals and gravel for road construction.

New Zealand’s total installed generation capacity is approximately 10,000 MW. More than half of generation in 2014 was from hydro stations. Almost 80% was from renewable sources – including geothermal, wind, biomass and solar as well as hydro.

New Zealand does not directly subsidise renewable generation. Other fuel types in New Zealand’s generation mix include coal, oil/diesel and natural gas.

New Zealand is a fast-emerging oil and gas producer with underexplored basins and significant petroleum potential. Oil and gas exploration and production has grown sharply in recent years and is now New Zealand's fourth largest export. The Government aims to increase the value of New Zealand petroleum exports ten-fold from $3 billion to $30 billion a year by 2025.

Oil and gas companies spent around to $2 billion on almost 90 new oil exploration and production wells between 2013-16. According to a Government research paper, even a modest find could see national employment in the oil and gas industry almost triple.

New Zealand's oil exploration and production are currently all in the Taranaki region on the west coast of the North Island. New on and offshore fields in this region continue to drive the industry, along with exploration work in other locations around the country. New Zealand now holds rights to some 5.7 million square kilometres of ocean and seabed (22 times its land area) containing 18 known sedimentary basins.

From a global perspective, New Zealand is a frontier oil and gas location. Lightly explored basins, low-risk and a straightforward entry and permitting process have seen increased investment and activity.

80% of NZs electricity comes from renewable resources

Significant resource potential and underexplored basins

All of New Zealand’s producing oil and gas fields are currently in the Taranaki region, which remains a focus for exploration. However, 17 other basins are likely to yield significant finds. Much of the recent and intended investment in exploration is focused on these underexplored or yet-to-be explored basins.

Fiscal regime

The fiscal regime governing energy production is favourable and comparable to the best current regimes in western Canada. Oil and natural gas production is subject to a 5 percent royalty until recovery of capital costs, followed by a 20 percent net accounting profits royalty. Energy companies are also subject to 28 percent corporate income tax, with tax treatments in place to avoid double taxation. Unlike many international settings, New Zealand has no ‘back-in’ clauses to impose unearned working interests or production-sharing requirements on domestic or foreign energy companies.

Infrastructure

New Zealand offers investors complete energy infrastructure as a result of years of oil and gas production along with a well-established geothermal industry, which uses similar field equipment and components. In-country infrastructure includes oil and natural gas processing facilities, a domestic natural gas distribution system, an oil refinery, an oil export hub in the North Island, oil terminals at ports on both islands, and an efficient roading network.

Strong expertise to support the sector

New Zealand has a long history in the oil and gas industry that dates back more than 150 years. Significant offshore interest has returned to New Zealand, thanks to improved offshore exploration technology (including floating Liquid Natural Gas).

Seismic and interpretive data available

The New Zealand Government is committed to open data and transparent processes and supports the oil and gas industry with up-to-date prospective data.
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