Brazilian oil giant Petrobas dumps NZ exploration permits

Brazilian oil company Petrobras will hand back exploration licences it holds for deep sea oil and gas prospects in the Raukumara Basin, off East Cape, in what appears a reaction to a string of difficulties which have seen the global oil company report losses for the first time in 13 years.

Prime Minister John Key told the New Zealand Herald that the decision was "not a reflection on the capacity to undertake deep-sea drilling or the prospect of activity of that area".

The Raukumara Basin lies in very deep water off the east coast of the North Island and has barely been explored.

Petrobras contracted a seismic survey ship to undertake initial surveys of parts of the basin early last year, where it encountered stiff opposition from a protest flotilla organised by Greenpeace and a local Maori tribe, Te Whanau a Apanui.

The New Zealand Navy was despatched to ensure the seismic survey could continue.

Petrobras has had what the Financial Times newspaper described early last month as an "annus horribilis", reporting its first quarterly loss in 13 years in the second quarter, disappointing investors in the third quarter and facing a 40% plunge in its share price over the year.

Among its difficulties have been falling production, foreign currency losses caused by the need to import fuel because of a lack of refining capacity in Brazil, government interference and most recently an order to pay back taxes of $U$2.4 billion dating back a decade and relating to offshore activities.

Mr Key said he understood Petrobras was "going through a bit of a regrouping phase and they're stepping back from what they're doing. I don't think it has got anything to do with the capacity to do the mining activity they were looking at undertaking".

"I think it's the context of their local and domestic issues they're dealing with" and should not be seen as a blow to the government's agenda for accelerating economic growth through oil and gas discoveries.

"I wouldn't really put it in those terms. That's a long-term project and opportunity out there. There are plenty of other people looking at lots of other options in the Canterbury Basin and the like."

Mr Key did not believe the court challenge from Greenpeace or Te Whanau a Apanui played any role in the decision.

(BusinessDesk)

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11 Comments & Questions

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Petrobas probably heard how long it takes to get resource consent from a mining company or two and decided to take their millions and the jobs it would create elsewhere ... somewhere where the "eco-terrorist" minority could hold sway over an entire countries economy.

How many millions/billions need to be lost for NZ Inc before economic treason laws were enacted? Or the RMA changed to stop whinging nay-sayers from holding NZ to ransom?

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Good win for the environment! The beneficial numbers that companies come up with are always over the top, just like the RWC gains that never came.

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Governments are elected to govern. The test for Jonkey is to fix the RMA - and confine the eco-terorists to a once-up moan at the beginning, not litigation in perpetuity.

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Yeah, but he is busy show boating around the globe and eating insects.

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We don't need another Rena oil spill.

NZ should be looking at alternative fuels. Who allowed such a Liberian-flagged container ship to sail into New Zealand? According to the Maritime Union, deregulation in 1990 by a former National government has created a situation where substandard flag of convenience shipping has been encouraged and enabled.

I would only support this if the Greens support it. Greens support gold mining. It's all about using common sense.

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What a plonker. I suppose we don't need further road tolls so we shouldn't import cars?

As for Greens ... well, Russel Norman has shown his colours. The guy is dangerous, with warp ignorant economic policies.

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LOL, Anonymous. That will hurt the eyes of some of the people who demonstrated against Petrobas.

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Greens and Maoris can show Petrobas the door...

What would the Diggers think?

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The Diggers would think NZ is nuts!
If Key is serious about catching up with Australia, he needs to be prepared to do what the Aussies do.
Over there, Petrobras has a 50% stake in a 1200sq km exploration block in the North Carnarvon Basin.
People often say it would be a good idea if all the green nutters could live on an island and experience for themselves the economic consequences of their eco-terrorism.
It seems that is now coming to pass. Pity that island has to be New Zealand.

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So the Green peasantry and the superstitious have won again and continues to hold us back and keep us poor.

I wonder how many cancer patients will die an early death because of this - because the country will be left in the position where it can't afford modern cancer treatments?

And you can substitute any other disease for cancer there because the effect of our poverty on that disease is the same.

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It may just mean that it is uneconomic to proceed at this time. After all, discovery of recoverable shale gas all around the world means that a large amount of oil will be left in the ground until prices justify going after it. That is good thing, isn't it?

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