Forecasts N.Z. better stocked Mr Birch

Press, 19 May 1984, Page 1

Forecasts

N.Z. better stocked Mr Birch

OLIVER RIDDELL

in Wellington

New Zealand is in significantly better shape to handle any wide-spread disruptions to Middle East oil supplies than it was during the 1979 “oil shock,” according to the Minister of Energy, Mr Birch.

He was commenting on the consequences of attacks on oil tankers in the Persian Gulf this week. But, he said, notwithstanding New Zealand’s improved position and the improvement world-wide, any escalation of the Middle East war would be very serious for the industrialised countries. Mr Birch said he would view any escalation with “grave concern.” New Zealand had enough imported oil for 98 days of consumption in stock, Mr Birch said. During the April, 1979, Iranian revolution, New Zealand had enough oil for 81 days. Mr Birch said New Zealand was now less reliant on imported energy; Condensate production from the Maui, Kapuni and McKee fields was rising, and increased use was being made of natural gas, compressed natural gas and liquefied petroleum gas. Fuel was also being used more efficiently. Consequently, New Zealand was importing less oil; 3.2 million tonnes this year compared with 4 million tonnes in 1979. The country was in a “comparable” position because its strategic reserves had been increased. Normally a lot of New Zealand’s own fuel products

could be processed at the Marsden Point refinery, Mr Birch said. But the refinery was shut down at present for biannual maintenance, forcing a total reliance on imported products derived largely from Middle East crude oils. This did not pose an immediate problem because much of this product was “lined up” at overseas refineries, or was already on the water to New Zealand. “It would take at least a month, if things worsened in the Middle East, for us to feel any impact here,” Mr Birch said. Once the refinery started working again in three weeks, and with the increasing diversity of fuel supplies that had been achieved, particularly from Indonesia, New Zealand would be in a

much more flexible position to face any future oil supply crises than it had been in 1979. Mr Birch, who is chairman of the International Energy Agency, said gross oil production from the Persian Gulf region was about 8 million barrels of oil a day. If the worst happened, and oil shipments had to end because of the hostilities, the West could arrange for alternative supplies through Nigeria, Venezuela, Indonesia, Libya, and the Saudi Arabian pipeline to Yenbo in the Red Sea. The oil-production capacity from these areas was under-used at present, Mr Birch said. With oil from these sources, the impact on the West would be reduced to a loss of 4 million barrels a day. International Energy Agency countries now got 20 per cent of their oil from the Middle East, and a net loss of 4 million barrels a day would represent about half that supply. The Persian Gulf supply was still “fairly normal,” Mr Birch said. As far as oil stocks were concerned, he said, the Agency member countries had reported that they had enough oil for an estimated 95 days. Further reports, page 10