First offshore oil permit granted since ban repeal

New Zealand has awarded the first petroleum exploration permit since the coalition Government reversed the ban on offshore exploration last year.

Resources Minister Shane Jones said New Zealand Petroleum and Minerals – the government regulator responsible for the Crown’s minerals estate – had awarded Adelaide-headquartered EnZed Energy a 12-year petroleum exploration permit covering about 546sq km in the offshore Taranaki Basin.

“This permit marks a major milestone for New Zealand’s energy sector and shows that without doubt, we are open for business,” Jones said in a statement.

“As the first new offshore petroleum exploration permit granted since the ban was reversed, it is a clear signal that confidence is returning and investors are once again prepared to back New Zealand’s resource potential.”

The permit area covers the Kaheru prospect.

Under the permit, EnZed Energy would undertake a staged exploration programme, beginning with a study of existing seismic data and geological studies to better understand the prospect’s potential.

With existing gas fields maturing, exploration remained an important part of understanding New Zealand’s future energy options, Jones said.

As of January 1, New Zealand’s proven and probable natural gas reserves had declined 23% from the previous year to 731 petajoules – the lowest level since records began more than two decades ago.

Jones said the decline underlined the need to better understand the country’s remaining resource potential.

“Exploration does not guarantee a discovery but it is an essential first step in understanding the resources New Zealand may have available to support future prosperity,” he said.

The sharp fall in gas reserves, combined with low lake levels and calm wind conditions, was a key driver of the 2024 power price spike.

EnZed Energy said its team had lived and worked in New Zealand and knew its geology, energy systems and regulatory landscape.

The company said the permit would allow it to undertake exploration activities within a defined area.

The initial work programme would focus on technical evaluation and interpretation of existing geological and geophysical information to better understand the area’s potential.

EnZed Energy executive chairman Neil Young said the permit represented an opportunity to apply decades of international exploration and commercial experience to a basin that remained “one of the most extensively studied petroleum provinces in the Southern Hemisphere”.

“Kaheru is well known in New Zealand’s oil and gas sector as one of the most prospective areas in the country.

“As such, it is an opportunity that deserves careful technical evaluation.”

The permit represented an important opportunity to test New Zealand’s potential for new, domestically produced energy.

A successful discovery could strengthen long-term energy security, reduce reliance on imported fuels, support reliable electricity and preserve industrial production in key areas such as fertiliser, Young said.

EnZed Energy expects any drilling programme will be conducted by a joint venture of a number of oil and gas companies, as is standard practice.

The company recognised that New Zealand was facing important questions about future energy supply as existing domestic gas production declines.

“There is no guarantee that any exploration programme will ultimately result in a commercial development,” Young said.

“However, we believe it is important that New Zealand continues to rigorously evaluate opportunities that have the potential to contribute to the country’s future energy needs.”

Young has over three decades of executive leadership across the energy sector, including founding and leading ASX-listed energy companies.

The ban was repealed by the current coalition Government in July, 2025, after the then Labour-led Government put it in place in 2018.

The last major offshore natural gas discovery was the Pohokura field, off the Taranaki coast, in 2000.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.