“We urge the government to invest in New Zealand’s long-term oil supply security to provide a better safety net against oil shortages,” said PEPANZ executive director Mike Patrick.

"Encouraging exploration for new reserves and accelerating the development of known resources, including those which are currently marginally economic, would give this country much greater capacity to survive overseas supply disruptions.”

Last week, Economic Development Minister Jim Anderton and Transport Minister Pete Hodgson discussed reports prepared for them on options for reducing motor fuel consumption in the face of unspecified disruptions of Western oil supplies.

The reports had mooted rationing, restrictions on the importaton of used cars, and “carless days” (where cars are only used six days a week).

But PEPANZ told EnergyReview.net that such moves would be alarmist responses and increasing oil exploration would offer more strategic benefits.

Patrick acknowledged recent government initiatives – such as decreased royalties for gas and government-funded seismic - but said more needed to be done with regard to oil.

New Zealand's self-sufficiency in indigenous oil had deteriorated from around 50% only a few years ago to the current 18%.

The only new discovery being developed was the gas-condensate Pohokura field, with other potential significant developments - Kupe, Tui and Maari - still awaiting final investment decisions.

“The major barriers to discovering and developing new oil reserves are financial ones, particularly the royalties and the tax regime that the government imposes on oil producers," Patrick said.

"If the government addressed these fiscal barriers New Zealand could return to about 60% self-sufficiency.

“New Zealand suffers from the tyranny of distance, and coupled with the high demand internationally for drilling rigs and other services, the costs of exploring here are extremely high."

PEPANZ has long sought government support for further amendments to the taxation regime, and for royalty relief for new oil developments, which would create greater incentives for more intensive exploration and production.

It is calling for a fiscal regime that encourages the discovery of new oil reserves. PEPANZ argues such a regime would also create many jobs, reduce the use of overseas funds and save consumers the costs of establishing an alternate oil supply security buffer.