New Zealand could suffer a severe energy shortage by the end of the decade unless it finds new sources of fuel by late 2006, BP executive Peter Griffiths said on Monday.
The managing director of BP Oil (NZ) Ltd is not foreshadowing a California-style blackout but says the situation is dire.
"By around 2008 there is a real risk there will be insufficient gas to fire our existing suite of power stations," he told Reuters on the sidelines of an energy conference in New Zealand.
"If we do nothing we won't have enough electricity towards the end of the decade."
With the cornerstone Maui gas field due to run dry in 2007 and around a third of New Zealand's electricity generated by gas-fired power plants, Griffiths said the first priority should be to hunt for domestic gas and put out the challenge to smaller explorers.
"Four million people scattered over an area the size of Oregon in California just doesn't really create much of a prize for an organisation of BP's size and so smaller niche players and niche fields are what are needed."
He said the government had made policy changes to encourage exploration that did not go far enough and proposed it make the upfront investment to lure explorers. "We need to put some money into it. Giving people tax breaks and royalty breaks - you have to have actually found something in order to collect any of that."
BP, which has had a presence in New Zealand for 58 years, pulled out of the upstream sector in the late 1980s. It currently has a 23 percent stake in the country's only oil refinery.
Royal Dutch/Shell, the only oil major involved in exploration in the country, said last year it would scale back spending in New Zealand after failing to discover significant new reserves in the past two years.