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Oil is New Zealand’s largest source of energy and therefore has a strong influence on our economy. Deregulation of the oil industry in 1988 removed price controls, government involvement in the refinery, licensing of wholesalers and retailers, and restrictions on imports of refined products. New Zealand exports local crude and imports both crude and refined petroleum products.
Domestic Oil Production
Oil is extracted from several fields in the Taranaki region. Nowadays, the Maari and Pohokura fields make up over half of domestic oil production. Maui, discovered in 1969 and beginning production in 1979, formerly provided the majority of domestic oil, but has since declined in significance.
Detailed information on current and historical petroleum permits can be found on the New Zealand Petroleum & Minerals website. The website also contains industry overviews, free technical data, maps and latest news from the industry.
While there are several producing oil fields in New Zealand, we are a net importer of oil. New Zealand’s locally-produced oil is generally exported because of its high quality and therefore high value on the international market. Australia purchases most of this oil.
The Middle East tends to be our largest source of crude oil (over half generally comes from there). Russia and Asia are also significant trade sources.
A small minority of the domestic consumption of petroleum products comes through imports from foreign refineries, predominantly located in Singapore and South Korea. There are around 15 20 tanker movements per month importing crude oil, feedstocks and petroleum products to New Zealand.
The Marsden Point Oil Refinery, near Whangarei, is New Zealand’s only oil refinery. It is operated by Refining NZ. The refinery began operating in 1964, and is capable of processing enough to meet a majority of domestic demand.
Refining NZ processes crude oil and condensate for the four biggest oil companies active in New Zealand: BP, Chevron (Caltex), ExxonMobil (Mobil) and Z Energy (formerly Shell). Each of these companies has a stake in the refinery, with other shareholders holding a minority.
The refinery produces a full range of petroleum products: petrol; diesel; kerosene-type jet-A1; fuel oil; bitumen and other petroleum products — but not aviation gasoline or lubricants. Sulphur is recovered as a by-product and sold as a feedstock to the fertiliser industry. Recovered carbon dioxide is sold to the beverage industry.
The refinery has had two major expansions, in 1985 and 2009. In May 2012, Refining NZ announced plans for a $365 million upgrade, expected to be complete in 2015.
Consumption of petroleum products
Diesel and petrol continue to dominate petroleum product consumption in New Zealand. Diesel is the primary fuel used for commercial land transport, therefore its use is strongly linked to economic performance. Petrol consumption tends to be for private use.
New Zealand’s oil consumption statistics are primarily collected via the Delivery of Petroleum Fuel by Industry (DPFI) survey. This is a survey of fuel deliveries to economic sectors (including independent distributors) by the five large oil companies operating in New Zealand (BP, Chevron, ExxonMobil, Z and Gull).
Independent distributors are also surveyed to allocate to economic sectors. Fuel deliveries made by independent distributors between 1990 and 2006 were estimated (no information was available for these years). The report Delivering the Diesel – Liquid Fuel Deliveries in New Zealand 1990 – 2008 outlines the methodology employed to perform this calculation.
Distribution and Storage of petroleum products
The four largest domestic oil companies own bulk storage facilities throughout New Zealand and have agreements in place which allow access to each other’s storage facilities. This enables the companies to draw stock from any location, if they have authorisation and sufficient stock in another location. This pooled storage system allows the companies to jointly manage stock levels and co-ordinate import shipments of petroleum products.
Gull operates its own independent petroleum storage terminal at Mount Maunganui. Products are transported from Mount Maunganui to Gull’s retail outlets by road tanker.
The petroleum delivery infrastructure in New Zealand incorporates:
- Import vessels
- Domestic coastal tankers
- Port storage facilities for bulk shipments
- A 170 km pipeline from the refinery to the Wiri depot near Auckland International Airport, and a Jet Fuel pipeline from the Wiri depot to the airport
- Road tankers
- Independent distributors (which both deliver petroleum products on behalf of the wholesalers, and also purchase their own fuel at wholesale prices to deliver to their own customers)
Oil, gas and LPG reserves statistics are available in the Energy in New Zealand tables.
This work is licensed under a Creative Commons Attribution 3.0 New Zealand License.