Norway's Statoil ends exploration in two New Zealand permit areas

The New Zealand government's plans to develop offshore oil and gas production received another blow Friday with Norwegian oil giant Statoil abandoning exploration off the top of the North Island.

Statoil said it had informed the New Zealand government of its decision to stop looking for oil and gas in the Reinga Basin.

In 2013 and 2014, the company was awarded two exploration permits for the Reinga Basin, about 85 km off the west of the North Island's Northland province.

"After studying 2D seismic data of the search area for the past three years, we think the chance of making a large oil or gas discovery is small, so we have decided to conclude our exploration work in Northland and return those exploration permits to the Crown," Statoil New Zealand country manager Brynjulv Kløve said in a statement.

"Some may speculate we are surrendering the permits for various reasons, but the only reason is that we see the probability too low to justify continuing our search."

The company would shift its focus to its four exploration permits off the southeast coast of the North Island, and to exploration projects elsewhere in the world.

The opposition Green Party said the government should now abandon its plan to turn New Zealand into a major oil and gas producing nation.

Statoil's decision followed Brazilian company Petrobras, which gave up looking for oil in New Zealand in 2012, and Anadarko, which gave up in 2014, Green Party energy and resources spokesperson Gareth Hughes said in a statement.

"It turns out the oil companies think there just isn't much oil in New Zealand, but the government is still desperately trying to open up another half a million square kilometers for drilling."

International environment campaign group Greenpeace greeted the announcement with a call "for a summer of action to drive Statoil and other oil companies out of the country for good."

"The industry should expect community resistance at every turn, and the government should prepare for a battering of its climate-denialist oil agenda," Greenpeace climate and energy campaigner Kate Simcock said in a statement.

Last month, the government controversially announced it was considering allowing further offshore exploration, including an area in the habitat of the world's rarest dolphin, the Maui's dolphin, which has an estimated population of just 55.

Energy and Resources Minister Simon Bridges acknowledged that oil prices were low, but said the government was "committed to providing a stable and predictable regime." Endit