OPINION: New Zealand has dropped off the global oil and gas map due to the government's antipathy towards fossil fuels, but at least OMV is still there to offer some hope of renewed exploration and production investment.
Since the April 2018 ban on new offshore exploration permits, all of New Zealand’s frontier offshore exploration blocks have been surrendered, and the total area under permit is about 80% less than when the ban came into effect.
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OMV and Beach Energy are the surviving operators of offshore fields, and the former is under pressure due to its under-performing Pohokura gas field, which has pushed up local gas prices.
At the same time, there is no available hydroelectric power to make up for the missing gas-fired electricity.
The coal-fired Huntly power station has had to ramp up generation to help fill the gap.
The government's critics have put the boot in, asking how the country can balance a 2050 net-zero emissions target and yet keep the lights on without gas.
The main political opposition party was outraged when it was revealed that government officials were considering liquefied natural gas imports as an option.
Opponents say the country is losing its energy security, its greenhouse gas emissions are going up, and consumers will pay more for electricity.
OMV appears unperturbed and is quietly moving ahead with its NZ$500 million ($362 million) drilling programme next year at Maui and Pohokura aimed at boosting gas production.
There is also the prospect of a new greenfield development if next year's appraisal drilling on the Toutouwai discovery is a success.
And it should be remembered that OMV and its Malaysian subsidiary, SapuraOMV, have active offshore exploration acreage in the Taranaki basin, with approvals to drill.
The Austrian company has made clear its objectives, globally, are to move away from oil to gas, and that it would be interested in growing its gas business in the Australasia region.
OMV will certainly find a more gas-friendly government in Australia — maybe even in Papua New Guinea — should New Zealand prove a dead end.
(This is an Upstream opinion article.)
