Shane Jones hopes for South Island oil and gas exports after lifting of ‘ban’
Friday, 1 August 2025
Resources Minister Shane Jones says he attempted to drum up interest in oil and gas exploration off the east coast of the South Island during a visit to Singapore last month.
That is even though he acknowledged any hydrogen-carbons discovered there would probably need to be exported because of a lack of a natural gas pipeline network and other infrastructure in the South Island.
Jones also told The Post the decommissioning rules for oil and gas wells could be further relaxed to encourage exploration.
A law overturning the ban on new offshore oil and gas exploration permits was passed by Parliament on Thursday.
Until now, the Government’s main justification for the law change has centred on an argument that more investment in gas production is needed to help fuel local industry and prevent future electricity price crunches.
But Jones told The Post shortly after the lifting of the exploration ban that he had been marketing the merits of exploration off the South Island during a visit to Singapore last month.
“I must have had about 12 or 13 engagements while I was in Singapore. They knew quite a bit about the existing Taranaki fields,” he said.
“I've steered people whilst I was up there to considering the South Island, although that's more of an ‘export play’.”
The challenge in the South Island was that there would need to be a “massive investment in and around the Port of Timaru”, to exploit any discoveries, he said.
Opposition MPs have cast doubt on whether explorers will resume offshore exploration anywhere off New Zealand given a string of drilling failures in recent decades.
The Taranaki Basin has already been relatively heavily prospected and Labour energy spokesperson Megan Woods laughed off the suggestion any search would resume off the South Island.
“Newsflash; billions of dollars have been spent looking for that particular El Dorado, and it simply isn't there,” she said.
An exploration well that Texan explorer Anadarko drilled in the Canterbury Basin in 2014 came up dry.
Wells drilled by Shell and OMV in the Great South Basin off the coast of Otago in 2014 and 2019 also failed to find commercially viable quantities of oil or gas.
New Zealand Oil and Gas, now Echelon Resources, surrendered the last remaining South Island exploration permit two years later.
Commenting on the prospect for generation more generally, Green Party MP Scott Abel said the Government was “trying to resuscitate a zombie that will not come back to life”.
But John Carnegie, chief executive of Energy Resources Aotearoa, most of whose members have interests in the oil and gas sector, said “even a limited chance of new investment is better than none”.
Jones was not promising explorers would return.
His job was to make it clear to investors, such as those he met in Singapore, that the Government had cleared away the blockages, he said.
“I was suitably impressed by their level of respect and interest. However, we're not the only gig in town.”
A last minute amendment to the law change lifting the ban on new permits would give ministers some discretion over where the liability for cleaning up disused oil and gas wells could fall.
But Jones said additional changes to other legislation might be justified to also reduce the work involved in future clean-ups.
New Zealand’s rules were stricter than those in other countries where oil and gas companies were allowed to leave some equipment in the ocean, rather than having to retrieve it all, and might warrant being reviewed, he said.
Environmental campaigners have reacted with horror to the lifting of the ban on new offshore exploration permits.
Alva Feldmeier, co-director of lobby group 350 Aotearoa, said New Zealand once claimed to a climate leader but was now an “international embarrassment”.