New Zealand Awards First Offshore Oil License Since Ending Drilling Ban

New Zealand’s government has awarded the first offshore oil and gas exploration license after last year lifting a ban on drilling, put in place by the previous government that wanted to focus on a transition from hydrocarbons to electricity from low-carbon sources.The new government, however, is focusing on energy security, and last year removed the ban, inviting companies to bid for its oil and gas resources. Now, Australian oil and gas firm EnZed Energy has become the first to tap New Zealand’s offshore oil and gas resources after the reversal of policy.“This permit marks a major milestone for New Zealand's energy sector and shows that without doubt, we are open for business,” the country’s resource minister, Shane Jones, said, as quoted by Reuters.EnZed’s permit is for 12 years in the Taranaki Basin, which, according to official data from the New Zealand government, already has 400 wells drilled across 20 oil and gas fields, but its potential remains underexploited.New Zealand, while not famous for its oil and gas, used to be self-sufficient in gas. This has changed over the past decade or so as production has dropped sharply and no new exploration has been allowed. Gas production last year averaged about 215 million cu m per month, compared with 415 million cu m per month in 2017.As a result, the country has become increasingly reliant on imports and, like other importers, has recently felt the drawbacks of that status. Even before that, however, the current government announced plans to have an LNG import terminal built, to be operational as early as next year, or in 2028.“New Zealand is experiencing a renewable electricity boom, but a rapidly declining gas supply has left our electricity sector exposed during dry years, when our hydro lakes run low,” energy minister Simon Watts said earlier this year.By Charles Kennedy for Oilprice.comMore Top Reads From Oilprice.comOil Prices Surge on Fresh Middle East Strikes and API Crude DrawSaudi Crude Tanker Goes Dark to Slip Through Bab el-MandebHormuz Tanker Crossings Sink to Lowest Level Since May as War Risk Spikes