1 00:00:00,240 --> 00:00:03,280 Speaker 1: Offshoil. Oil and gas exploration in New Zealand is no 2 00:00:03,400 --> 00:00:07,640 Speaker 1: longer banned. The Crown Mineral's Amendment Bill has passed its 3 00:00:07,680 --> 00:00:12,320 Speaker 1: third reading in Parliament this afternoon. So John Carnegie is 4 00:00:12,520 --> 00:00:15,880 Speaker 1: Energy Resources all Tailor Red Chief Executive and John joins. 5 00:00:15,600 --> 00:00:19,400 Speaker 2: Soon now Hello John, Hello, good evening. You welcome this 6 00:00:20,680 --> 00:00:22,079 Speaker 2: and we most certainly do. 7 00:00:23,040 --> 00:00:25,600 Speaker 1: What does this change for the oil and gas businesses 8 00:00:25,600 --> 00:00:27,280 Speaker 1: operating in New Zealand. 9 00:00:28,080 --> 00:00:31,240 Speaker 2: Look, well, it's important to start by saying the only 10 00:00:31,280 --> 00:00:35,280 Speaker 2: way for economic growth is through energy abundance and natural 11 00:00:35,320 --> 00:00:38,159 Speaker 2: gas is a critical role to play in achieving this. 12 00:00:38,280 --> 00:00:41,000 Speaker 2: And look, we've all felt the effect of an energy 13 00:00:41,000 --> 00:00:43,920 Speaker 2: shortage over the last couple of years in terms of 14 00:00:43,920 --> 00:00:48,519 Speaker 2: the threat of electricity blackouts, factory closures and high prices. 15 00:00:48,560 --> 00:00:51,400 Speaker 2: And actually we don't need to stay on this path, 16 00:00:51,880 --> 00:00:56,320 Speaker 2: and this bill reflects a change of path. Look, it 17 00:00:56,360 --> 00:00:59,280 Speaker 2: definitely changes the outlook for the better. And of course 18 00:00:59,320 --> 00:01:04,200 Speaker 2: it's it's not a silver bullet, but combined with the 19 00:01:04,280 --> 00:01:06,680 Speaker 2: nature of the changes and it it sends a positive 20 00:01:06,720 --> 00:01:11,000 Speaker 2: signal that New Zealand is serious about attracting capital back 21 00:01:11,040 --> 00:01:11,880 Speaker 2: into the sector. Again. 22 00:01:12,000 --> 00:01:14,119 Speaker 1: Absolutely, but as you say, it's not a silver bullet. 23 00:01:14,200 --> 00:01:16,920 Speaker 1: Because here's the thing. Lots of expiration has happened over 24 00:01:16,920 --> 00:01:19,480 Speaker 1: the last thirty years, but the fines have been minimal. 25 00:01:20,319 --> 00:01:24,479 Speaker 1: Is this really? Is there really a fortune underneath our feet? 26 00:01:25,480 --> 00:01:29,120 Speaker 2: I look, New Zealand is highly prospective in terms of 27 00:01:30,040 --> 00:01:36,280 Speaker 2: oil and gas. The part of the problem, particularly over 28 00:01:36,280 --> 00:01:39,040 Speaker 2: the last or since the band the last seven years, 29 00:01:39,120 --> 00:01:42,240 Speaker 2: is that the oil and gas sector has been confined 30 00:01:42,480 --> 00:01:46,880 Speaker 2: to their existing mature and near end of life fields, 31 00:01:46,920 --> 00:01:49,960 Speaker 2: and so it gets harder and harder, and also the 32 00:01:50,000 --> 00:01:53,600 Speaker 2: incentive to invest diminishers when effectively an entire sector is 33 00:01:53,640 --> 00:01:58,080 Speaker 2: told that they're not welcome anymore. So we're hopeful. 34 00:01:58,080 --> 00:02:01,200 Speaker 1: You're hopeful? Are you relatively commonnfident that in fact there 35 00:02:01,200 --> 00:02:04,040 Speaker 1: could be another find which will extend the life of 36 00:02:04,040 --> 00:02:07,400 Speaker 1: our natural gas fields, in particular because that's used in 37 00:02:07,440 --> 00:02:09,680 Speaker 1: so many industries and it's used by so many people 38 00:02:09,720 --> 00:02:12,760 Speaker 1: for cooking, and if that goes, we're then solely dependent 39 00:02:12,800 --> 00:02:16,440 Speaker 1: on electricity. So are you confident, not just hopeful, but 40 00:02:16,560 --> 00:02:19,919 Speaker 1: confident there are more gas? There is more gas to 41 00:02:20,040 --> 00:02:20,519 Speaker 1: be found. 42 00:02:21,280 --> 00:02:23,880 Speaker 2: Oh, look, there is most certainly more guests to be 43 00:02:24,120 --> 00:02:28,200 Speaker 2: found on the spill gives us the chance to do that. 44 00:02:28,480 --> 00:02:32,520 Speaker 2: I mean, for years now, the messages our settings have 45 00:02:32,639 --> 00:02:36,280 Speaker 2: been sending to both domestic oil and gas producers and 46 00:02:36,600 --> 00:02:41,440 Speaker 2: international investors as don't bother, you're not welcome. So we're 47 00:02:41,639 --> 00:02:45,079 Speaker 2: now starting to tell a very different story, one that 48 00:02:45,160 --> 00:02:49,400 Speaker 2: an invites capital and capability back into the country. 49 00:02:49,440 --> 00:02:52,640 Speaker 1: Are you expecting that capital to come back? You know, 50 00:02:52,919 --> 00:02:55,800 Speaker 1: having had the set back, having thought okay, let's just 51 00:02:55,800 --> 00:02:58,360 Speaker 1: write New Zealand off the agenda, do you think they 52 00:02:58,400 --> 00:03:00,000 Speaker 1: will come back or do you think they will be 53 00:03:00,160 --> 00:03:00,600 Speaker 1: gun shy? 54 00:03:04,080 --> 00:03:10,080 Speaker 2: Well? Where again, we're hopeful that now that we've got 55 00:03:10,680 --> 00:03:15,760 Speaker 2: different regulatory and commercial settings, that investors will start to 56 00:03:16,360 --> 00:03:21,040 Speaker 2: reassess New Zealand is a place to invest and look 57 00:03:21,560 --> 00:03:23,080 Speaker 2: more favorably on doing so. 58 00:03:23,760 --> 00:03:26,000 Speaker 1: But what happens if Labour wins the next election, and 59 00:03:26,080 --> 00:03:28,200 Speaker 1: will they slap the band right back on? And then 60 00:03:28,280 --> 00:03:31,560 Speaker 1: will overseas agencies who actually fund this sort of thing 61 00:03:31,600 --> 00:03:34,000 Speaker 1: already be thinking that and thinking well, no, it's going 62 00:03:34,040 --> 00:03:35,720 Speaker 1: to take a long time for us to earn their 63 00:03:35,720 --> 00:03:36,200 Speaker 1: trust back. 64 00:03:37,880 --> 00:03:40,040 Speaker 2: Oh well, look, I mean I think the sector is 65 00:03:41,240 --> 00:03:44,040 Speaker 2: it's more than happy to work with whoever is on 66 00:03:44,240 --> 00:03:53,800 Speaker 2: government to to assure them that they can do their 67 00:03:53,840 --> 00:03:58,160 Speaker 2: activity in an environmental sound way. It can do it 68 00:03:58,160 --> 00:04:00,480 Speaker 2: in a way that protects the risks to text bars 69 00:04:00,840 --> 00:04:02,960 Speaker 2: and in fact do it in a way that keeps 70 00:04:03,000 --> 00:04:07,560 Speaker 2: our factories humming, internationally competitive in our households able to 71 00:04:07,600 --> 00:04:11,080 Speaker 2: afford energy. So you know, I think there's a range 72 00:04:11,120 --> 00:04:13,760 Speaker 2: of positive benefits from greater expiration. 73 00:04:14,200 --> 00:04:17,000 Speaker 1: Now this new Crowd Minerals Amendment Bill, there was a 74 00:04:17,040 --> 00:04:20,479 Speaker 1: late change around the liability for decommissioning oil and gas operations. 75 00:04:20,520 --> 00:04:23,040 Speaker 1: And there's been coverage this week about the two he 76 00:04:23,200 --> 00:04:27,280 Speaker 1: Find and Tarlanaki that was financed by Tamarind out of Malaysia, 77 00:04:27,360 --> 00:04:30,000 Speaker 1: and they went broke and then they walked away, and 78 00:04:30,040 --> 00:04:32,560 Speaker 1: they didn't decommission and they didn't clean up, and so 79 00:04:32,640 --> 00:04:35,760 Speaker 1: the taxpayers ended out with a three hundred million dollar charge. 80 00:04:36,400 --> 00:04:38,520 Speaker 1: We then changed the laws to make sure that the 81 00:04:38,560 --> 00:04:41,800 Speaker 1: operators were then liable for their mess. Is there a 82 00:04:41,880 --> 00:04:44,760 Speaker 1: risk that taxpayers could end out having a Tamarind situation 83 00:04:44,920 --> 00:04:46,400 Speaker 1: back on their hands again in the future. 84 00:04:47,480 --> 00:04:50,599 Speaker 2: Well, first of all, I think we should point out 85 00:04:50,600 --> 00:04:52,720 Speaker 2: that Tamaran was able to come into the country via 86 00:04:52,760 --> 00:04:59,359 Speaker 2: a legislative loophole which was closed. So regulators actually do 87 00:04:59,440 --> 00:05:02,920 Speaker 2: their job. We'll only get permit holders who are financially robust. 88 00:05:04,520 --> 00:05:09,039 Speaker 2: But the thing that the camera and instance highlighted was 89 00:05:09,120 --> 00:05:11,800 Speaker 2: the need to manage financial risk appropriately, and that's what 90 00:05:11,880 --> 00:05:16,560 Speaker 2: this set of reforms aims to do. The industry clearly 91 00:05:16,640 --> 00:05:20,600 Speaker 2: supports a more discretionary, case by case approach to decommissioning 92 00:05:21,000 --> 00:05:23,799 Speaker 2: because the risks aren't the same across all permit holders. 93 00:05:25,120 --> 00:05:29,120 Speaker 2: So you know, what's important is that this bill will 94 00:05:29,160 --> 00:05:33,440 Speaker 2: now act strikes the right balance protecting tax payers while 95 00:05:33,520 --> 00:05:36,440 Speaker 2: still allowing investment in the infrastructure we need. 96 00:05:37,680 --> 00:05:39,840 Speaker 1: Well, John Kennig, I presume it's a very good day 97 00:05:39,880 --> 00:05:41,640 Speaker 1: to you, and I thank you very much for your 98 00:05:41,640 --> 00:05:46,000 Speaker 1: time today. John is the Energy Resources are Chief Executive 99 00:05:46,279 --> 00:05:48,200 Speaker 1: and this is News TALKSB. 100 00:05:49,160 --> 00:05:52,359 Speaker 2: For more from Hither Duplessy Allen Drive, Listen live to 101 00:05:52,400 --> 00:05:55,560 Speaker 2: News Talks ITB from four pm weekdays, or follow the 102 00:05:55,600 --> 00:05:57,200 Speaker 2: podcast on iHeartRadio.