Thursday, 3 February 2005

Copeland backs call for review of oil royalties regime

United Future energy spokesperson Gordon Copeland, a former BP executive, today backed calls by petroleum explorers for a review of the current royalties regime for new oil discoveries.

“New Zealand’s petroleum self-sufficiency has dropped from over 50% in the mid-1980s to just 20% in 2004, at a time when oil prices are rising rapidly,” he said.

“Royalties can only be collected once oil is discovered so it is logical, at this point in our history, to remove all disincentives. We need to actually discover new oil fields before we even begin to think about royalties.

“Even if we are lucky enough to find a new large oil field we need to ensure that the returns are sufficient to bring the oil to market, before worrying about taxes and royalties.

“We have not only got the cart before the horse but no assurance that a cart even exists! I can think of no other single event which could give our economy a real shot in the arm than the discovery of a major new oil field,” said Mr Copeland.

ENDS

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