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New Zealand Oil & Gas (NZOG) has dropped its final exploration permit, marking the end of an era for an industry which is once again limited entirely to Taranaki.
On Wednesday morning Wellington-headquartered NZOG told the NZX that it had decided to relinquish to the Crown Petroleum Exploration Permit 55794, a roughly 5000 square kilometre permit also known as Toroa, which lies in waters hundreds of kilometres south of Balclutha, to the east of Stewart Island.
While it is not unusual for permits to be returned to the Crown, Toroa was the latest in a string of permits in the area to be relinquished in the Great Southern Basin and Canterbury Basin.
An MBIE official confirmed that assuming all of the surrender applications are accepted, New Zealand will have no exploration permits in any area outside the Taranaki Basin, where all of New Zealand's oil and gas exploration is based.
The news is likely to be celebrated by environmental groups, but comes as New Zealand's gas supplies are becoming increasingly stretched.
NZOG chief executive Andrew Jefferies blamed a "confluence of events" for dropping the permit, ranging from "adverse regulatory settings for offshore exploration", the failure of rival OMV to find commercial oil in the last South Island well in 2019/2020, other nearby permits being dropped and the effect of Covid-19 on drilling costs and rig availability.
All of those factors have caught the Toroa permit in the same perfect storm," Jefferies said.
"We have exhausted all avenues to find a potential partner to progress drilling this acreage and so reluctantly relinquish."