Premium On Condensate

Press, Volume CVI, Issue 31366, 11 May 1967, Page 1

Premium On Condensate

(N.Z. Press Association)

WELLINGTON, May 10. The Government had agreed to a premium price for the first nine million barrels of condensate from Kapuni of 75 United States cents a barrel above the average price of imported feed stocks, said the Minister of Mines (Mr Shand). The Minister said this was expected to be produced in about seven years. The condensate will be recovered and handled by Shell, B.P. and Todd for the refinery at Whangarei. "The purpose of the premium to be paid on this first commercial discovery of petroleum in New Zealand is to encourage further exploration,” the Minister said. The cost of exploration if the off-shore prospects continued to be favourable might be considerably greater than the £lO million spent to date by the group of companies. The premium would be reflected ultimately in the price of petroleum products, but would have only a marginal effect. “It is impossible to give a figure for this because it will depend upon the rate of production from the field,” Mr Shand said. “It will probably affect the price of petrol by about one-tenth of a penny; certainly not more than a farthing.’ Mr Shand said he hoped for

one million barrels of condensate a year before the fifth year. The quantity would depend on gas consumption, according to the consortium chairman (Mr J. B. Price). The proportion of condensate produced to gas would gradually fall but there probably would not be much fall-ing-off in the first five years. Mr Shand said that in fix-

ing the premium price New Zealand was following a precedent established at the Moonie field in Australia, and more recently by the British Government in payment for the first gas discovery in the North Sea. By controlling imports, the United States Government had fixed an effective price to local producers up to 1 U.S. dollar a barrel above the landed cost of imports, Mr Shand said.