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New Zealand was on Saturday night expected to revoke a ban on drilling for oil and gas amid fears of blackouts, as Labour plans to impose a similar crackdown on the North Sea.

The country’s coalition government is preparing to invite energy companies to resume exploration in the three major offshore fields that supply most of its gas.

It comes after National Grid operator Transpower was last month forced to warn families to limit their electricity usage to avoid a shutdown during a cold snap.

The decision to reverse the ban, made by resources minister Shane Jones, will be a setback for green activists and likely to be regarded as a blow for Labour after Ed Miliband has repeatedly pledged to halt new drilling for oil and gas in UK waters.

However, New Zealand’s change of course has been cheered by industry leaders. John Carnegie, chief executive of trade body Energy Resources Aotearoa, said: “We welcome a return to sensible, pragmatic policy settings that fairly manage the upstream oil and gas sector to the benefit of all New Zealanders.

“New Zealand faces an energy shortage which threatens our electricity system and the competitiveness of our exporters.

“We now urgently need to attract further investment in exploration and production to keep the lights on, our houses warm and business humming.”

The exploration ban was introduced by Jacinda Ardern, who announced her resignation as New Zealand prime minister in early 2023. In an election that autumn her party was thrown out of office and replaced by a right-wing coalition. 

Mr Carnegie said the policy had driven investors away, destroyed jobs and created energy chaos.

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