Oil producers paid $511 mil in royalties last year

Media release – for Scoop News Service

16 April, 2010

Oil producers paid $511 million in royalties last year

Oil producing companies in New Zealand paid $511 million to the New Zealand Government in petroleum royalties last year under existing agreements with the Crown says the Petroleum Exploration and Production Association (PEPANZ).

PEPANZ Executive Officer John Pfahlert said today the item posted on Scoop by Gordon Campbell entitled “On getting a fair deal for our oil and mining resources” was incorrect in a number of areas.

“While Mr Campbell asserts that the current government seems intent on dropping the royalty regime the fact is that the Government has not said that it will change the regime – either up or down. All the Government has said is that they will be reviewing the fiscal regime. The headline royalty rates are but one element of that regime. Other elements include allowable deductions for exploration, the exemption of support vessels during seismic surveys from NZ tax laws, and what type of royalty regime should apply in NZ.

“Regular reports on production from producing wells are provided to the Ministry of Economic Development as a base for assessment of royalties to be paid. The fact that the industry last year paid $511 million in royalties suggests that the regulations providing for this reporting are working satisfactorily.

“Mr Campbell says there is not even the glimmering of an enforceable compensation scheme if major oil spillages should result in lasting damage.

“What we do have is a comprehensive regime in place under the management of Maritime New Zealand to fund oil spill contingency planning and cleanup. Funds are collected from the industry on an agreed schedule to deal with any spillage that may take place in the marine environment. Associated with this regime is a Oil Pollution Advisory Committee to advise on action that should be taken.”

In the event that the company which spilt the oil can be identified, the legislation allows for compensation to be sought from them to reimburse the oil spill fund.

ENDS

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