New Zealand Gov’t Oil Plans Under Fire

From NZ Week

Brazilian oil giant Petrobras is pulling out of exploration in waters off the east coast of New Zealand’s North Island after a sustained campaign by environmental groups to prevent drilling in the area.

The Ministry of Business, Innovation and Employment (MBIE) announced Tuesday that it had accepted an application from Petrobras to surrender its exploration permit for the Raukumara Basin, which it had held since June 2010.

The company had gathered 2,305 km of 2D seismic data and it had an option to surrender the permit after gathering the information.

“This is a commercial decision, based on a number of factors including how the company will be prioritizing its oil and gas exploration portfolio worldwide,” MBIE director Kevin Rolens said in a statement.

“The Raukumara Basin is considered to hold high potential for oil and gas development, and is an important frontier basin for future oil and gas exploration activity in New Zealand.”

The area was relatively unexplored with no previous commercial activity so the data was expected to be of interest to other companies exploring in New Zealand, said Rolens.

“The work Petrobras has done has added to the information regarding the potential for oil and gas projects in the region and will be freely available for other companies wanting to explore.”

Prime Minister John Key said Petrobras could return to New Zealand, but it was going through “a bit of a regrouping phase,” Radio New Zealand reported.

“I don’t think it’s got anything to do with the capacity to do the mining activity they were looking at undertaking,” Key said in the report.

Finance Minister Bill English told Radio New Zealand that other companies could take an interest.

“The government’s done a good job of making it attractive, but the companies have got their shareholders, they’ve got changes in world energy markets and they’ll make their own decisions,” he said.

Opponents welcomed the news, which follows U.S. firm Anadarko’s announcement earlier this year that it would not be carrying on with plans for deep sea drilling off the west coast of the North Island.

The opposition Green Party said the government’s plans for ” risky” deep sea oil drilling in New Zealand were collapsing.

“The government’s deep sea drilling plans have so far failed, and it’s just as well. Petroleum development, including deep sea drilling, is the wrong focus for our economy,” Green Party energy spokesperson Gareth Hughes said in a statement.

“The government has chosen to pick the petroleum industry as a winner, but in reality it is jobs poor and environmentally risky.”

International conservation group Greenpeace said the Petrobras decision was a blow to the government’s business growth strategy, which was intimately linked to the interests of foreign oil and mining companies.

“However you look at this, it really calls into question the government’s petroleum plans. Not only is it an environmental and economic risk if it proceeds, but it is a serious economic gamble which depends on the whims and fortunes of foreign oil companies,” Greenpeace climate campaigner Simon Boxer said in a statement.

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