Small oil and gas companies are vying to secure exploration permits offshore New Zealand in the coming months before a potential reinstatement of the drilling ban in the country.
Last year, New Zealand reopened for oil and gas exploration, ready to receive applications for exploration projects after a seven-year pause, following the lifting of a ban on such activity installed by the previous government.
The upstream policy reversal has not led to new drilling contracts so far. But some of the oil and gas firms willing to secure permits are in a race against time to sign contracts before the November general election.
Ahead of the election, the opposition Labour Party, which led in recent polls, said it would ban new offshore permits but honor existing contracts.
As a result, oil and gas companies are racing to secure drilling rights before the November election.
New Zealand’s Resources Minister Shane Jones told Reuters that investor interest had rebounded in recent months.
“It’s taken us a while to straighten out the regulatory environment and, more recently, people have shown they’re willing to risk money and have a go,” Jones told Reuters.
Companies now have about three times as long to sign formal agreements for offshore exploration and have an existing contract if Labour wins the election and forms a government.
“For existing permits, we have said that we would honor them, but we don’t believe the government should be propping up an outdated industry,” acting Labour Energy and Resources spokesperson Tangi Utikere told Reuters.
Meanwhile, the current government of New Zealand, early this year, shortlisted proposals to have the country’s first LNG import terminal operational by early 2028 as it looks to boost energy security amid falling domestic gas supply.
New Zealand’s natural gas buffer has all but vanished in the past decade, as production has slumped and an offshore exploration ban was in place between 2018 and 2025.
By Charles Kennedy for Oilprice.com
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