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Poor response to oil exploration offer

NZ Newswire logoNZ Newswire 14/12/2016

There's been a poor response to Block Offer 2016 and only one oil exploration permit will be granted, Energy Minister Simon Bridges says.

The offer was announced in March, when the government opened up a bigger area than ever before for oil and gas exploration.

Mr Bridges says it received a low number of bids in comparison to previous years and one onshore permit will be granted to Todd Energy.

"The global downturn in the petroleum industry that began in late 2014 has had a profound effect on exploration expenditure worldwide," Mr Bridges said on Thursday.

Block Offer 2016 included four offshore and one onshore area covering a total area of more than 525,000sq km.

The permit that will be granted to Todd Energy covers an area of 219sq km in the Taranaki Basin.

Mr Bridges says annual block offers will continue, despite the low interest.

"New Zealand has had a very successful run since adopting annual block offers," he said.

"From 2011 to 2015 companies have invested $7.7 billion in oil and gas exploration and production."

The Greens say the issue of a single permit shows the government's attempts to attract overseas fossil fuel investment have failed.

"Fossil fuels are yesterday's fuels and we should be focused on supporting New Zealand's home-grown clean energy expertise instead," said energy spokesman Gareth Hughes.

"We've got oil companies giving up on New Zealand left, right and centre, which goes to show the government has been backing the wrong horse."

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