Consultation on areas for 2013 petroleum block offer

Consultation on areas for 2013 petroleum block offer under way

8 November 2012 - Consultation with iwi and councils with an interest in areas being proposed for the 2013 petroleum exploration permitting round is now under way.

"Today we are contacting iwi and councils with an interest in the areas that may be tendered next year. Feedback received will inform final decisions about the make-up of the Block Offer 2013 competitive tender planned to commence by the end of April 2013," says David Binnie, General Manager, NZP&M.

The areas being considered for Block Offer 2013 include five defined onshore blocks, and three offshore exploration areas, over which companies can apply for a permit area up to a prescribed limit.

"The proposed 2013 offer includes three onshore blocks in Taranaki and two on the East Coast," says David Binnie.

"The proposed offshore areas, excluding current permits, are in the Northland/Reinga Basins, Taranaki Basin, and Canterbury/Great South Basins."

"Companies will be able to submit a permit bid up to a limit of 10,000 km2 in frontier areas and up to 2,500 km2 in the offshore Taranaki Basin.'

The offshore areas proposed for Block Offer 2013 exclude already permitted areas and may form the basis of block offers in 2014 and 2015.

Block Offer 2013 will be the second year in which the government will exclusively use a 'block offer' annual competitive tender process to allocate permits for oil and gas exploration. The first round, Block Offer 2012, closed in October with permits expected to be granted by the end of the year. Between 2002 and 2010, the government also conducted 13 other block offers in various parts of the country.

The government’s annual block offer process is an important part of developing New Zealand’s future oil and gas reserves.

"To make the most of our oil and gas resources, we must attract responsible companies to explore New Zealand's potential oil and gas reserves. It is through such exploration that we better understand the geology of the area and where commercially viable discoveries may be made," says David Binnie.

"Oil and gas already play an important part in the New Zealand economy – and that contribution will grow for future generations if successful discoveries are made and developed responsibly."

Consultation with relevant iwi and councils commences 9 November 2012 and closes 30 January 2013. Permits are expected to be awarded in December 2013.
Permits awarded as part of Block Offer 2013 will be under a new Crown minerals regime, which is expected to be in place in early 2013.

Proposed changes to the regime include consideration of health and safety and environmental credentials at the point of permitting, annual meetings between government agencies and operators of a permit, and improved information sharing arrangements between agencies to strengthen the management of permits over the lifecycle of an operation.

The proposed changes are set out in the Crown Minerals (Permitting and Crown Land) Bill currently before the Commerce Select Committee and draft minerals programmes currently under consultation.

Background

The selection of onshore blocks and offshore areas takes into account prospectivity and anticipated commercial interest. A mixture of exploration, appraisal, and frontier acreage has been selected to appeal to a diverse range of companies, and promote a stable path to oil and gas production.

Once consultation has been completed and the final makeup of the tender determined, New Zealand and international companies will then be invited to tender for petroleum exploration permits. Applications will be evaluated based on the work programme provided and a number of criteria including the applicant’s technical and financial capability and capability to meet expected health and safety and environmental requirements. Permits are expected to be awarded by the end of 2013.

Exploration permits allow for investigation of the potential for oil and gas development. Gaining an exploration permit is the first of many steps an operator is required to take in order to develop a petroleum resource. Permitting enables the start of projects that can have a life cycle of around 50 years. Once an operator is granted an exploration permit they must negotiate land access with land holders and occupiers, and meet health and safety and environmental requirements.

Environmental effects of activities in permits will be managed under two pieces of legislation:

• Administered by regional and unitary councils, the Resource Management Act 1991 applies to onshore permits and permits located out to 12 nautical miles from the coast.

• The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012. The legislation is expected to come into effect in 2013 before permits are awarded, and will apply to activities beyond 12 nautical miles offshore. It will be administered by the Environmental Protection Authority.

Health and safety matters will be regulated under the Health and Safety in Employment Act 1992 and new Petroleum Exploration and Extraction regulations.

More information on Block Offer 2013, previous block offers and relevant regulatory processes

ENDS

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