Govt may cut oil investment

Press, Volume CXVI, Issue 34107, 20 March 1976, Page 12

Govt may cut oil investment

CV.Z. Press Association) NEW PLYMOUTH. The Minister of Energy Resources (Mr Holland) strongly’ hinted on Thursday that the Government may cut its investment in oil exploration. The Government is at present paying 40 per cent of oil exploration costs for a 51 per cent interest in any discoveries on specific licences. This would cost about s3om this year, said Mr Holland. “This is proving to be a very expensive hobby for the New Zealand taxpayer and we are currently looking into our participation in this field and asking whether 40 per cent is a reasonable figure,” he said. Mr Holland said Government involvement ensured that a share of profits from any discoveries remained in the country. The problem confronting the Government, however, was how to retain

[an interest in discoveries 'with a reduced initial stake. I The Minister’s comments : came after a day spent ■(inspecting the Maui work fleet with officials of Shell, ’ 8.P.. and Todd and Maui [: Development, Ltd. Asked about a final deci- ' sion on what will be done ■ with Maui gas. the Minister would say only that a fully co-ordinated energy policy I was being drawn up and i P Maui. naturally, figured prominently in this. ' The plan would be flexible , enough to allow for changes ' should further oil or gas disj coveries be made in the near 1 future but a final commitment would have to be made some 1 time this year. ; Although a petrochemical * industry using Maui gas had J not been ruled out by the ‘ Government, Mr Holland said ‘ such an industry would have to be looked at very carefully.

They were expensive to set up and had to be highly competitive to survive. The Government would also have to be convinced that ready markets existed for all the byproducts, Mr Holland said.