Over the last three years, our current incompetent government has been running New Zealand into an artificial recession. But they keep blaming the previous government, especially on the oil and gas exploration ban. So over three years how have they done to realise active exploration? Not much. So we now have a typical Shane Jones blowhard face saving announcement. Typically squandering taxpayers money again.
There are as far I am aware no active exploration programs actually planned in the near future for new fields outside of the Taranaki onshore and offshore structure. The only one there that appears to be active is the Enzed.
This isn’t a good look for a government that is was so determined to revive the oil and gas industry in NZ – the industry that hasn’t managed to find a significiant new source in more than 20 years.
So today they announced a mapping project in Taranaki and a loan equity program specifically to assist what appears to be the solitary active prospect. There are currently 31 active petroleum exploration permits, all except one appear to be from prior to stopping the issuing of new permits.
The mapping project is worth while. Even if we never burn more gas, just knowing where the chemical feed stock prospects are is an investment into our future. However the support for the Kaheru prospect looks more like a face-saving gesture by Shane Jones, our most notable blowhard politician.
$14.5 million to contract Schlumberger New Zealand (SLB) to create the first basin-scale offshore pseudo 3D dataset using state-of-the-art seismic technology – with free access for industry for two years to incentivise companies to explore in New Zealand.
…
The Schlumberger project will bring together existing public and private datasets, alongside proprietary seismic technology that improves access to and understanding of the underground geology in the Taranaki, East Coast, and Great South basins.
“The value of this project is that it transforms a huge amount of fragmented subsurface exploration information into a single, basin-scale, AI-enabled exploration product delivered in industry-standard format,” Mr Jones says.
“This is easier to access and interpret, making it more useful for industry. It will be very attractive to international exploration companies deciding where to put their money and effort.”
The datasets will be available free of charge to potential explorers for two years, reducing costs and improving access to key information for the sector.The EnZed Energy project will explore the promising Kaheru prospect off Taranaki to determine whether commercially recoverable gas is present.
Politik newsletter 2026-09-25
“This project could identify a significant new source of domestic gas supply to help meet our nation’s energy needs in the coming years. It targets an estimated 182 petajoules of additional gas reserve in the Kaheru permit. That’s equivalent to nearly 25 percent of New Zealand’s January 2026 proven and probable gas reserves,” Mr Jones says.
The EnZed project appears to represent this governments only ‘success’, that I know of, about in reviving the oil and gas exploration. It appears to be at a stage where it is just trying to attract investors to get involved in investigating a small field – estimated at 182 petajoules (PJ). In other words, it is marketing to investors to actually do the actual drilling to prove this smallish field.
For comparison the last substantive field discovered was the Taranaki onshore field Tūrangi in 2005. That field is estimated to have 380PJ remaining in a total proven and probable total NZ reserves of 731PJ at the end of 2025.
New Zealand used about 105PJ of gas in 2025. By sector it is roughly 35-39% is large industrial as high temperature or feed-stock (mostly Methanex which uses most of that sector), 29% for generating electricity, 7% for commercial, and 10% for residential and other (schools, hospitals, etc). The electricity consumption varies a lot depending on what the renewable provides.
So 182 PJ is a drop in the bucket when you consider that it is highly unlikely to start producing in quantity in less than a decade – if everything worked perfectly. Perhaps that may happen if Shane Jones isn’t around. But it still won’t be enough to be particularly useful.
Of far more relevance, Methanex will stop its consumption in the first quarter of 2027. It has been using 37-40% and up to 50% at times of our gas production. It also has barely paid any tax in NZ for long periods of time, instead exporting profits to its parent company, including its massive ETS rebates.
So Shane Jones and this government in this term have now made a largely meaningless gesture towards their commitment to their probably futile oil and gas exploration election pledge. In typical Shane Jones blowhard style by effectively subsidising a another private company with a taxpayer provided subsidy. Probably with the usual result of Jones picking winners – another auditor-general report looking at wasted taxpayer resources.
They have failed to get any interest in fields outside of the Taranaki structures, and not anything vary substantive much in Taranaki. Which was the main reason that the previous government stopped concentrating on trying to find more gas, and instead started investing in weaning the country off that wasteful addiction.
A better use of that money and the other money being thrown at oil and gas exploration and subsidies would have been to increase the overall capacity of renewable electricity generation and transfer, especially base load geothermal, offshore wind and wind grid connections, electricity buffering in batteries of various types, and a residential solar.
That would give more time for current industrial, commercial, residential, and other gas users to change their equipment on our remaining gas reserves.
The geological databases will prove useful in the long term. Even small pockets would be useful if we use them to foster local specialist industries.
But I suspect that the days of finding surprisingly large gas fields in New Zealand is over. It was close to a miracle that we found any large gas fields in the first place given our geology, and the way it has been squandered over my lifetime is a tragedy. I was born in 1959, the same year as Kapuni field was discovered. It was one of the reasons that my first degree was in Earth Sciences.
Could the title of this post be reworked to say, "The Government is gassing on gassing"? 🙂
I did have several different titles for this post. That was the most seemly, prim, and proper. It didn't mention bloat, wanking, prolific waster, and I dialed back my true feelings considerably.
I was highly restrained… So should you be as well…. 🙂
I'll try, but your true feelings are inspirational…
I was going to suggest " pathetic on gassing, but terrific on gaslighting"
My Dad was a geologist on Penrod '74 – Great South Basin. He reckoned vast oil reserves down there – we still have the little glass bottles of crude and condensate to prove it.
Trouble is, too deep and rough down there to economically access.
Yeah, that was what I understand as well.
https://en.wikipedia.org/wiki/Great_South_Basin
Also the strike was away from the coast. I think that they did 3 holes, found condensates and a actual hydrocarbon strike. Then the Penrod went to Singapore ?? for repairs.
Rough is the North Sea. The seas south of Invercargill go well beyond that from what I have heard. Only safe way would probably be to do everything under water.
I went to edge of the arctic circle on a leviathan called the the ocean alliance, semisubmersable satellite positioning , no anchors , over 30 years ago , I reckon if there was real oil there they'd have gone back. To the south basin
I've heard the myth of the south basin on and off in the past.
It was real. The geology favours a similar kind of geological formation as Taranaki, deep basin that slowly filled with sediment including vegetation, suitable geological heating and impermeable overlay. The Penrod 74 drilled about 8 holes with 3 showing promise. But the best prospect was something like 140 miles south of Stewart Island.
The various followups found similar patterns. Promise, but hellish conditions and a long long way from land.
Lost family members who were trying to commercially fish down that way – in the early to mid part of 20th century.
Remember watching friends surf off the Catlins coast, nice sunny, very mildly windy day – and the waves were still 5 meters.
It was real, believe me. As said above, still have the little bottles of condensate and dark black crude, from Penrod itself. Little pieces of tungsten drill bits he used to bring home. And my dad was an experienced geophysicist who worked in the middle east, North Sea, Canada, and Africa, said that he knew there had to be a world class oil reserve down there.
I believe him.
I know they went , and belive you, but I've heard the odd conspiracy on why they never went back , maybe it is to wild , but we where deep water arctic circle west of Shetland, I only did one trip in high summer but I'd imagine it isn't a picnic up there when it blows.
I smell socialism
Predictions of "do-ability" for off-shore wells surely get blasted away by the increased energy in wind and ocean that come with climate change.
I agree with the whole post except it doesn't mention grid-scake solar.
Texas, the oil state, has adopted grid-scake solar in style. So has Australia.
NZ should follow suit, with grid-scale battery storage attached of course.
Puzzled. Grid scale solar is going in already. With more on the way.
Like wind installations, the main fundamental constraint now appears to be get the grid connections. Typically scale operations take 3 or more years to get a connection if they don’t have to do too much work to extend the grid.
Your links show the pathetically small quantities of grid solar at the moment.
Agreed. But consider that the first plant only got put in in 2023 (late 2023 as I remember it). So by the end of 2025 there were 5. I believe that 8 more are planned to be opertational in 2026. Most of the already installed are continuing to expand.
For project work that is a pretty impressive ramp up. Especially when you consider it against the increments for wind or geothermal projects. (and lets not even discuss hydro or Rankines).
The difference is that once solar gets a grid connection, then while that have space they can keep adding small increments (ie solar panels and connections to the plan internal grid) continually. Whereas the increments for wind are more chunky work wise because of separation and access. Geothermal increments even more so.
It isn't the number of solar plants that is the issue. It is getting the grid connections that is the constraint. Especially when we're looking at the inadequate Northland grid
One of the interesting things from the EDB side is that the regulations, connection processes and software are only just starting to catch up with the growth in solar and other distributed generation.
There are regulatory changes coming into effect on 1 December that put much more emphasis on EDBs reporting their connection pipelines, including proposed generation.
So it will be interesting to see what that data looks like once we have a year or two of it. Installed capacity tells us where we've been; the connection pipeline should give us a much better idea of where we're actually going.
My suspicion is that there's considerably more solar trying to get onto networks than the current installed numbers suggest, and that at least one of the constraints has simply been the amount of resource EDBs have historically put into processing new connections.
Anything over 50MW goes to Transpower rather that the EDBs. They definitely have resources constraints. That is pretty obvious in their connection process.
It starts with (my bold)
Agree….Hipkins should not only be promising support for grid scale solar with batteries (which to his credit he has), but also for improvements to the transmission lines to aid integration with solar.
Btw the gentailers are the reason both residential and grid scale solar have been slow to develop in NZ as I'm sure you are aware. They see it as a threat to their profits.
Problem for them is that it will certainly be a challenge to their profits if they don't facilitate it.
There will be a lot of people (like me) looking at their electricity bills, thinking about the line charges, the amount paid to send power to the grid, and the reducing capital costs of adding storage. Deciding to go completely off their grid. Maybe supplying any surplus to neighbours.
That will probably include a lot of commercial and industrial users as well.
Heard someone talking about the commercial bakers on the radio the other week was really interesting, sounds like the indecision both their own and the current govts is shaping up to be a massive problem. In short the most of the big ovens which produce the 'supermarket bread' are gas fired and most could be converted to LPG, the factories are built around the ovens so not a matter of just swapping the oven out to an electric. More a case of building a new facility around a new oven which is a multiyear process and apparently there's a 3-4 year wait list on the ovens themselves. Sounded like the large bakers had been hanging their hats on that LPG terminal as gas runs down.
That would be the unstated case across the industrial, commercial, and residential uses of gas.
However the government framed this as dry-year electricity issue. Why?
In my view it is was presented that way because the cost or providing the LNG facilities could be largely foisted on to the electricity consumers. They'd get hit 3 ways..
This is an area that I think should be treated as completely user pays. This has been a crisis that has been obvious to have been coming for at least 25 years.
At least to anyone who looked at the lack of substantial gas finds, and the wastage of the local natural gas resources when exporting 40-50% of the local gas production by feeding it to Methanex.
That should have been everyone in business of supplying or using natural gas. Instead they decided to accept the risk of a lack of future supplies of natural gas. That includes the bakers putting in new plant (and my dad's kitchen). They should wear the cost of the risk. Not electricity consumers.
The full cost of any facility should be directly pushed onto the cost of all natural gas used starting as soon as the plant is approved to be built.
Use of natural gas (and possibly coal) in the production of electricity should be removed from the electricity marketplace in determining period electricity prices. Make that come directly out of the pockets of the generators and their shareholders.
It has been pretty obvious in the way that they have been paying dividends and revaluing long-paid-for assets upwards over the last few decades that they haven't been committing capital towards creating the generation capacities required to handle dry year issues. Instead they have been living in a the kind of fairytale that Shane Jones has been lost in his whole life – that someone else always pays – not them.
Shifting the marketplace like that would send a very clear price signal to gas users, the gentatilers, and the government about the need to change. The gentailers, who are largely owned by the government as shareholders. The government who is the sole shareholder of Transpower who provided the connections for large new power projects.
I'd expect that it'd massively accelerate the implementation of renewable electricity projects. In particular geothermal, solar and wind – but probably some enhancements of existing hydro as well. It'd also provide a very strong price signal about improving the grid to allow transfers of electricity.
The alternative would be for electricity consumers, especially residential, to start setting up their own generation and drop the grid. It'd be cheaper than subsiding gas users.