New Zealand brushing off challenge of low oil prices

WELLINGTON, New Zealand, Sept. 19 (UPI) -- Even though lower crude oil prices may be inhibiting investments, New Zealand's government said it was moving ahead with plans for onshore sales as planned.

Analysis early this year from consultant group Wood Mackenzie said energy companies are reassessing their spending plans, sidelining high-risk fields that may have been economical under better market conditions two years ago.

New Zealand Energy Minister Simon Bridges said the country was nevertheless moving ahead with its latest offer for offshore acreage as planned.

"I acknowledge the challenging low oil-price environment that industry is currently facing but we know commodity prices are cyclical," he said in a statement. "The government remains committed to providing a stable and predictable regime."

Oil is the fourth-largest export for New Zealand, bringing in around $700 million each year in royalties and taxes. The government said there are around 149 million barrels of oil reserves remaining in fields already in production.

Bridges said energy is a strategic asset that provides a significant source of revenue and power for a country looking to offset oil and gas developments with a low-carbon economy. The government is taking a long-term view by looking for a balance between opportunities in both renewable and non-renewable forms of energy. For New Zealand, natural gas in particular could serve as a vital link to a low-carbon economic future.

New Zealand's government said Monday's announcement marks the start of a consultation period for permits covering about 196,400 square miles onshore. The consultation period ends Nov. 18 and tenders will be announced in March.