MEDIA RELEASE

12 December 2014

EPA looks forward to high levels of compliance with new EEZ law

The Environmental Protection Authority (EPA) is expecting high levels of compliance with the new Exclusive Economic Zone (EEZ) legislation as operators become more familiar with the regime’s strict new requirements.

General Manager Enforcement and Compliance Andrea Eng said the first 17 months of the new regulatory regime had been a steep learning curve for operators.

She said the EPA had now completed its first set of inspections of structures that were in existence prior to the passage of the new legislation. “Overall the level of compliance with the new regime has been good – but our inspections found there have been some low levels of non-compliance for which we have issued three formal warning letters.

“We inspected the existing structures being operated by Shell Todd Oil Services (STOS), OMV NZ Ltd (OMV), AWE Ltd and Origin Energy (Kupe) Ltd. Two of these operators have been issued with formal warning letters for not fully complying with the strict new rules applying to petroleum and mineral activity in the EEZ.”

STOS has been issued with two formal warning letters and OMV has received one formal warning letter. Both operators will be subjected to more frequent inspections by the EPA.

In addition, two other breaches of the legislation by operators did not meet the threshold for enforcement action. AWE Ltd’s benthic monitoring programme was carried out without the proper authorisation; and inspections of activities carried out during the initial transitional period found that Anadarko Petroleum Corporation did not fully comply. Both operators have been reminded of their obligations under the EEZ Act.

Mrs Eng said that the EPA had always expected that it would take some time for the new regulatory regime to bed down. “Some of the problems that have arisen have been due to initial differences in interpretation of the requirements of the EEZ Act.

“We have been putting a lot of effort into working with operators to ensure they know how to comply with the new legislation. This has included workshops, production of guidance material, identifying and working through potential issues, and promoting compliance with the legislation at industry events.

“Now that operators have a better understanding of their obligations we expect there will be an increased level of compliance with the regulations.

“The EPA will continue to work closely with operators to increase understanding of the new EEZ regulatory regime. However, we will take enforcement action when it is clear that our education efforts are not being taken on-board. We have a range of enforcement options including formal written warnings, abatement notices, enforcement orders and prosecution. Penalties can include fines up to $10 million.”

Below is a summary of the compliance and enforcement action carried out by the EPA since the EEZ Act came into force in June 2013.

Summary of EEZ compliance issues

The EPA carried out inspections of structures that were existing at the time the EEZ Act came into force. The following issues of non-compliance were found:

• The EPA carried out an inspection of the Maui platforms operated by STOS off the Taranaki coast on 27-29 May 2014. As a result, STOS was issued with a formal warning letter for drilling two side track wells at its Maui A platform between September 2013 and June 2014. It was issued with a second formal warning letter for drilling a side track well at its Maui A platform between July 2014 and August 2014. STOS should have sought a ruling or marine consent from the EPA for these activities. The second episode of non-compliance was carried out prior to the determination by EPA that STOS should have sought approval from the EPA for drilling the first two side tracks wells. STOS has been told that continued or future non-compliance relating to similar activities may result in other compliance interventions including elevated enforcement action.

• The EPA carried out an inspection of the Raroa Floating Production, Storage and Offtake facility (FPSO) and Tiro Tiro Moana Wellhead Platform operated by OMV at its Maari field development in the South Taranaki Bight on 6-9 May 2014. Consequently, OMV was issued with a warning letter for carrying out two activities between July 2013 and November 2013 for which it should have sought a ruling or a marine consent. These activities were the repair of mooring legs and the disconnection and reconnection of the FPSO.

The EPA carried out inspections of activities that took place in the 12 month transitional period up until 28 June 2014. The following non-compliance was found.

• The EPA carried out an inspection of the Noble Bob Douglas Drill Ship operated by Anadarko on 25-26 February 2014. The EPA found that Anadarko had failed to identify four activities in the Environmental Impact Assessments it had provided to the EPA in 2013. These included the re-spudding of a well, the mooring of a remotely operated vehicle on the seafloor, removal of a well head, and incorrect descriptions of well locations. Given the nature and impact of the activity and that it took place during the first few months of the transitional period, it was determined that no further action was required.

The EPA’s role

The EPA forms part of an integrated regulatory regime for managing activities in New Zealand’s Exclusive Economic Zone (EEZ) and Continental Shelf (CS). We are responsible for managing the effects of certain restricted activities on the environment in the EEZ and CS under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act). The purpose of the EEZ Act is to promote the sustainable management of the natural resources of this area. Our role is to consider applications for marine consents, monitor compliance with the EEZ Act and any conditions on marine consents, carry out enforcement, and promote public awareness of the requirements of the EEZ Act and associated regulations.

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