A major oil explorer is quitting New Zealand as spending on offshore drilling plunges from $700 million three years ago to nothing and the government promises to tighten controls on the industry.

US company Anadarko said that with persistently low oil prices marginal investments in speculative, frontier areas were less attractive.

Country head Alan Seay confirmed it had made the "tough call" to pull out although its partners in the Carrack-Caravel prospect off Canterbury, Lattice Energy Resources and Discover Exploration, had indicated they want to continue.

The oil and gas sector said it remained optimistic about prospects and was hopeful the new government would make decisions "based on science".

The Petroleum Exploration and Production Association of NZ (Pepanz) head Cameron Madgwick yesterday said it was disappointing but not surprising to see Anadarko leave.

"The company is pulling back on some of its international operations due to the low global oil price," he said.

"It has nothing to do with the prospects here in New Zealand. We are still considered to have exciting potential, as seen by the recent New Zealand Oil & Gas study into the Barque prospect near Oamaru."

New Zealand was competing with other potential markets around the world and needed to have good policy settings to remain attractive as an investment destination.

Pepanz said the sector contributed an estimated $2.5 billion to GDP and the government collected about $500 million a year in royalties and income tax from the sector.

Speaking before news of Anadarko's withdrawal, Madgwick said confidence had grown in the sector as the oil price stabilised.

Read more at Source