Business Abroad: Energy for New Zealand

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Three months ago, when Britain decided to apply for membership in the European Common Market, none of the Commonwealth nations was quite so dismayed as tiny New Zealand. The prospect that joining the Common Market might force the British to raise their tariffs on Commonwealth agricultural products spelled major trouble for New Zealanders, who import virtually all their manufactured goods from Britain, pay for them with exports of wool, meat and butter. (About 35% of the butter Britons eat comes from New Zealand.) Last week New Zealanders heard more cheering economic news: Prime Minister Keith Holyoake announced that a major natural-gas field had been discovered in Kapuni on New Zealand's North Island (see map).

The first significant discovery in more than 40 years of exploration for oil and gas in New Zealand, the Kapuni strike was made by a consortium of Royal Dutch/Shell, British Petroleum and New Zealand's Todd Oil Services Ltd. Though unofficial estimates run higher, the consortium itself conservatively places the productive capacity of the Kapuni field at 100 million cu. ft. a day—or enough to generate 40 times as much electricity as is used by New Zealand's largest city, Auckland (pop. 422,900).

Besides reducing the need for expensive new hydroelectric plants, the gas find improved prospects for development of New Zealand industry, previously stunted for want of a cheap domestic fuel source. Some New Zealanders even launched into heady talk of using the gas to generate the power for electric furnaces that could extract iron ore from the hitherto useless mineral-laced sands of Taranaki province. But in the short run, what raised New Zealand's hopes the most was Holyoake's report that the Kapuni gas carried with it a substantial quantity of light oil which, if it can be fed into the $56 million refinery now under construction at the North Island port of Whangarei, would help reduce the nation's annual bill of more than $50 million for imported oil and gasoline.