Page 38 - Oil&Gas-AustralAsia-2015-Issue-2
P. 38
N EW ZEALAND
New Zealand expects low oil
prices and production to bite
coffers
By Marie RYAN
Pohokura is a gas field off the north-west Taranaki coast. Image
courtesy of Aidan A
The New Zealand government is pre- Six years ago, New Zealand earned an The Ministry of Business Innovation
paring for a sharp fall in revenue after estimated $542 million in oil and gas and Employment says there is more to
the price of oil dropped, combined with royalties, the figure boosted by strong this debate: cheaper oil brings cheaper
lower earnings stemming from declin- production at the Tui offshore oil well, petrol, saving motorists hundreds of
ing rates of oil production. last year, that figure shrank to $371 dollars a year, and giving them money
New Zealand’s royalty system is struc- million. to spend elsewhere in the economy.
tured for oil companies to pay five per The Ministry of Business Innovation Mr Nash agreed there was a benefit as
cent of sales or 20 per cent of profits and Employment expects the sum to well as a cost, but said people should be
or whichever is higher, on the grounds fall further, though it would not say by vigilant to make sure it flows through
that petroleum originally belonged to how much specifically. to them.
New Zealand as a whole. It is estimated with the price of oil He said not only would petrol prices
However with the price of oil falling on around half what it was a year ago, the be cheaper at the pump, but oil-based
world markets New Zealand analysts fall should be material in its impact. products like plastic would also be
have said New Zealand government The country’s Labour Party’s energy cheaper, which he hoped would flow
earnings from royalties will fall accord- spokesman Stuart Nash said there was through to ordinary consumers.
ingly. even worse to come, due to the fact that At this stage, the price of oil is inching
Analysts contend the price of oil is lower earnings for oil companies would up slowly from a four-year low, but
expected to stay low for two years, cut state revenue from taxes as well. international commentators say if a
which should bring down the country’s This means that State earnings which recently-struck political deal with Iran
earnings from royalties for that length were more than enough to pay for a beds in, the world could be flooded
of time. medium-sized district health board will with more oil, knocking off recent
These comments come as the Govern- probably end up paying for about half gains.
ment royalties have fallen anyway, due of it.
to declining oil production.
A A36 OIL & GAS ustral SIA MAY/JUNE 2015 www.oilandgasaustralasia.com
New Zealand expects low oil
prices and production to bite
coffers
By Marie RYAN
Pohokura is a gas field off the north-west Taranaki coast. Image
courtesy of Aidan A
The New Zealand government is pre- Six years ago, New Zealand earned an The Ministry of Business Innovation
paring for a sharp fall in revenue after estimated $542 million in oil and gas and Employment says there is more to
the price of oil dropped, combined with royalties, the figure boosted by strong this debate: cheaper oil brings cheaper
lower earnings stemming from declin- production at the Tui offshore oil well, petrol, saving motorists hundreds of
ing rates of oil production. last year, that figure shrank to $371 dollars a year, and giving them money
New Zealand’s royalty system is struc- million. to spend elsewhere in the economy.
tured for oil companies to pay five per The Ministry of Business Innovation Mr Nash agreed there was a benefit as
cent of sales or 20 per cent of profits and Employment expects the sum to well as a cost, but said people should be
or whichever is higher, on the grounds fall further, though it would not say by vigilant to make sure it flows through
that petroleum originally belonged to how much specifically. to them.
New Zealand as a whole. It is estimated with the price of oil He said not only would petrol prices
However with the price of oil falling on around half what it was a year ago, the be cheaper at the pump, but oil-based
world markets New Zealand analysts fall should be material in its impact. products like plastic would also be
have said New Zealand government The country’s Labour Party’s energy cheaper, which he hoped would flow
earnings from royalties will fall accord- spokesman Stuart Nash said there was through to ordinary consumers.
ingly. even worse to come, due to the fact that At this stage, the price of oil is inching
Analysts contend the price of oil is lower earnings for oil companies would up slowly from a four-year low, but
expected to stay low for two years, cut state revenue from taxes as well. international commentators say if a
which should bring down the country’s This means that State earnings which recently-struck political deal with Iran
earnings from royalties for that length were more than enough to pay for a beds in, the world could be flooded
of time. medium-sized district health board will with more oil, knocking off recent
These comments come as the Govern- probably end up paying for about half gains.
ment royalties have fallen anyway, due of it.
to declining oil production.
A A36 OIL & GAS ustral SIA MAY/JUNE 2015 www.oilandgasaustralasia.com
