New Zealand will co-invest in new gas fields in the country, the government announced in its budget on Thursday, as it looks to attract investments into the sector after lifting a ban on offshore oil and gas exploration.
The government has set aside a contingency of NZ$200 million ($118.60 million) over four years for co‑investment in new gas fields, Resources Minister Shane Jones said in a statement.
The investment signals a willingness for the government to take a commercial stake of up to 10-15% in new gas field developments, the minister said, adding that the action helps resolve New Zealand’s declining natural gas reserves.
"We are already feeling the pain of constrained supply,” Jones said.
"We have demonstrated potential for significant gas development and while investors are interested, we need to show their commitment will not be a wasted exercise," he added.
New Zealand's ruling conservative coalition reversed a ban on offshore oil and gas exploration last year that had been in place since 2018, and called for investment in the oil and gas sector.
New Zealand's budget set new spending for the current fiscal year at its lowest in a decade, keeping a tight rein on its fiscal purse even as it warned of a "trade shock" to the economy from the global tariff war.
($1 = 1.6863 New Zealand dollars)
(Reuters - Reporting by Praveen MenonEditing by Shri Navaratnam)