Phil Heatley

11 December, 2012

Block Offer 2012 Awards Ceremony

Welcome to the Block Offer 2012 Awards Ceremony.

It’s a great pleasure to be hosting this event to award the permits from the Government’s first annual Block Offer.

In August last year we announced the move to an annual block offer process and the abolition of the Priority in Time permits.

Block Offer 2012 areas have now been consulted on, tendered, carefully considered, and today, permits are being awarded to the strongest bids and to those companies most capable of delivering their proposed work programmes.

As a Government we have set some set ambitious economic goals for New Zealand.

Building a more competitive and productive economy is one of four main priorities of this Government – and the petroleum sector is an important part of achieving that goal.

Already we have a sector that makes a significant contribution to the economy. Crude oil is our fourth largest commodity export. Nationally, the sector provides well over 7,000 jobs and injects $2 billion into our economy.

Maximising the potential of our oil and gas resources is a key part of the Government’s Business Growth Agenda.

The Taranaki Basin and frontier basins, where discoveries will support the economy in the future, are now being promoted through the Block Offer process, with a range of opportunities across multiple basins offered in 2012.

Naturally we’re very pleased at the strong interest in the tender. It shows that New Zealand is becoming a key destination for both domestic and international investment in oil and gas exploration.

Today, investment in New Zealand is about to receive a significant boost, with the award of 10 exploration permits, and an overall committed work programme expenditure of $82 million, including firm commitments to 10 new wells in Taranaki.

If that work is successful, it could lead to further expenditure of up to $776 million within five years.

Key successes of Block Offer 2012 are:

• a new international player, East West Petroleum, who have partnered with TAG Oil subsidiary Cheal on three permits in the Taranaki Basin – welcome East West!

• the opening of the previously unexplored Pegasus Basin

• a further commitment to exploration of the Great South Basin

• continued firm interest in Taranaki.

The aim is for New Zealand to have an economically sustainable industry that supports the local economy and our international competiveness for the foreseeable future – and Block Offer 2012 is a long step in the right direction.

The success of 2012 is something we expect to repeat in 2013 and annually thereafter.

ENDS

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