Crown Minerals Reform Reopens Oil and Gas Exploration to Boost Energy Security

In a significant shift in New Zealand’s energy policy, the Crown Minerals Amendment Bill has passed its third and final reading, paving the way for a new wave of oil and gas exploration as early as September 2025, Resources Minister Shane Jones has announced.

The landmark legislation, which effectively removes the 2018 ban on offshore oil and gas exploration outside of onshore Taranaki, is central to the Coalition Government’s energy strategy focused on reviving domestic investment, securing energy supply, and reducing reliance on imported fossil fuels.

“This Government is pragmatic about the vital role natural gas will play in our energy mix in the decades ahead,” Minister Jones said. “We’ve set a course for greater energy security backed by our own indigenous reserves.”

Reversing the 2018 Exploration Ban

The 2018 exploration ban introduced under the previous government was criticized by industry leaders and some economists for creating a chilling effect on domestic energy investment. Minister Jones argues that the ban had crippled the sector, discouraged innovation, and led to an accelerated decline in proven gas reserves.

According to industry data, reserves have been depleting faster than projected, resulting in rising energy costs and dependence on imported Indonesian coal to meet winter demand peaks.

“We are seeing regional businesses close, Kiwis losing their jobs, and the country becoming more reliant on imported coal—all while domestic gas supplies dwindle,” said Jones.

The passage of the Crown Minerals Amendment Bill is intended to send a clear signal to investors that New Zealand is once again open for business when it comes to resource exploration and development.

What the New Law Changes

The Crown Minerals Amendment Bill introduces a suite of reforms aimed at making the regulatory environment more investment-friendly while safeguarding the Crown’s financial interests. Key changes include:

• Lifting the oil and gas exploration ban beyond onshore Taranaki, re-opening large parts of New Zealand's offshore territory to new permit applications.

• Improved decommissioning rules that bring New Zealand into alignment with international best practices, ensuring that companies clean up after themselves when fossil fuel infrastructure is retired.

• Introduction of a new permit tier to support small-scale, non-commercial gold mining, especially appealing to hobbyist miners and regional communities.

• Provisions to encourage investment in Crown-owned minerals, including coal, gold, and rare earth elements that are essential for energy and technology industries.

Addressing Decommissioning Liabilities

A key concern addressed during the legislative process was a gap in liability rules for the decommissioning of petroleum infrastructure. Under the old framework, parent companies could offload liabilities by selling their shares, leaving the Crown vulnerable to unfunded decommissioning costs.

The new regime introduces ministerial discretion to assign decommissioning responsibilities not only to current permit holders but also to former operators and stakeholders if necessary.

“I want those who benefited from petroleum permits to remain responsible for decommissioning infrastructure,” said Jones. “A one-size-fits-all approach doesn’t work in a complex industry.”

While financial securities will remain the core tool for managing risk, this new discretionary power adds a critical layer of accountability to ensure that the public does not bear the cost of environmental remediation.

Phased Implementation

While many of the provisions in the bill will take effect immediately, others will require secondary legislation and phased implementation, with the full suite of reforms expected to be operational by the end of September 2025.

In preparation, the government will develop the necessary regulations and frameworks to allow operators to begin applying for new exploration permits from September onward.

Economic and Energy Implications

Supporters of the legislation argue that reinvigorating domestic oil and gas exploration is essential for economic resilience, particularly in the regions, and for stabilizing energy prices in an increasingly volatile global market.

Natural gas is still seen as a “transition fuel”, capable of complementing renewable energy sources such as wind and solar, particularly when managing peak load or intermittent supply.

The reforms are also framed within a broader agenda to restore business confidence, stimulate resource-sector jobs, and reassert New Zealand’s resource sovereignty at a time when global energy security concerns are rising.

“This legislation is just one of many actions we are taking to resuscitate sector confidence, shore up energy supply, and protect electricity affordability,” Jones concluded.

Next Steps

With the Crown Minerals Amendment Bill now enacted, attention will turn to implementation and industry engagement. The Ministry of Business, Innovation and Employment (MBIE) will oversee the operational rollout, including publishing guidelines for new permit applications and finalizing the secondary legislation.