Petroleum & minerals sector boosts NZ economy

The petroleum and minerals sector generates $333 per hour worked, making it the most productive in the New Zealand economy, a new Government report shows.

The Petroleum and Minerals Sector Report was today released in Wellington by Economic Development Minister Steven Joyce and Energy and Resources Minister Simon Bridges.

The report notes that in the last six years New Zealand has seen:

• a dramatic lift in petroleum exploration and development, totalling $8.3 billion
• $1.9 billion in levies and royalties being paid to the Crown – $380 million in 2012 alone.
• investment in mineral prospecting and exploration is at an historical high ($47 million in 2012).

The sector generates $333 per hour worked (GDP for the sector divided by the number of hours paid), compared to the New Zealand average of $48 per hour worked, and workers are paid on average $105,000 per annum – more than twice the New Zealand average.

“New Zealand’s Petroleum and MineralsSector is benefitting considerably from increased global demand. Over the past 10 years employment in the sector has more than doubled and exports have tripled,” Mr Joyce says.

Mr Bridges says: “The summer ahead will be one of the largest on record for oil and gas exploration in New Zealand with 13 exploratory wells being drilled offshore and 27 onshore. The industry is expected to spend $600 million to $755 million.”

The petroleum and minerals sector produces commodities which are fundamental to the economy – energy in the form of oil, gas and coal; steel; gold and silver; fertiliser; and rock, sand and gravel for construction and roads.

“We have seen the benefits in the Taranaki regional economy in terms of jobs, the growth of businesses in the supply chain, and huge new investment in downstream industries, such as Methanex,” Mr Bridges says.

Mr Joyce says: “If we want more and better paying jobs and more money to invest in our schools and hospitals then we need to keep making the most of our abundant energy and minerals potential through environmentally responsible development.”

The report also notes a number of influences are driving changes in the sector globally, including higher oil prices, increasing production of unconventional petroleum, and increasing concerns over the impact of climate change.

The report is the third in a series of seven that provide detailed information about different sectors of the New Zealand economy.  They are designed to support the Government’s Business Growth Agenda by improving understanding of each sector and their economic contribution.

The report is available at: http://www.mbie.govt.nz/what-we-do/business-growth-agenda/sectors-reports-series