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Views of a Gas Producer

Views of a Gas Producer. 2004 New Zealand Petroleum Conference. Topics for Discussion. Re-definition of topic "Views of an exploration and production (E&P) company" Defining features of an E&P company Overview of the New Zealand energy market New Zealand as an E&P investment destination

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Views of a Gas Producer

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  1. Views of a Gas Producer 2004 New Zealand Petroleum Conference

  2. Topics for Discussion • Re-definition of topic "Views of an exploration and production (E&P) company" • Defining features of an E&P company • Overview of the New Zealand energy market • New Zealand as an E&P investment destination • the "Good news" • the "Bad news" • Measures to assist the E&P sector

  3. Views of an exploration and production (E&P) company • Key features of an E&P company: • International business • Investments in NZ compete with investments worldwide • Business involves oil, condensate, Naptha, LPGs and natural gas • Investment of large amounts of money on an ongoing basis • Strong focus on the future, not just the present • Very high risk • Good information is critical • Risk mitigation is essential: portfolio of assets and opportunities, Joint Ventures

  4. Overview of the New Zealand energy market • Major change • Increasing concern about imminent supply shortage • Maui field rapidly nearing the end of its life • Reliance on Maui has delayed evolution of the gas market and made transition very difficult • Maui Field and Maui Gas Contract have deterred investment in E&P • E&P sector is in relatively poor shape

  5. New Zealand as an E&P Investment Destination- the "Good news" • New Zealand is prospective for oil and gas • New Zealand rates high as an investment dstination in terms of political stability, low levels of corruption, legal system, open economy • Economics of E&P investment in New Zealand have improved • Gas market is being restructured to facilitate new sources of gas supply

  6. New Zealand as an E&P Investment Destination- the "Bad news" • New Zealand is remote • New Zealand is small • Geographic isolation = market risk • Lumpy demand = market risk • Gas market is immature • E&P sector lacks momentum, capital constrained • Increasing regulatory and business risk • New Zealand lacks infrastructure

  7. Measures to Assist the E&P Sector • Royalty relief • Protecting the gas market • Commerce Act amendment to permit joint marketing • Evolution of the gas market • Avoid unwarranted regulation • Tidy-up tax laws

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