Govt to control where oil companies explore
By Pattrick Smellie
Aug. 30 (BusinessDesk) – Oil companies wanting to explore in New Zealand will be restricted only to areas nominated annually by the government after consultation with both the industry and potentially affected communities.
Acting Energy Minister Hekia Parata announced the new policy at the launch of the official version of the government’s New Zealand Energy Strategy, which had earlier been leaked and was unchanged in almost every respect apart from the new “block offer” regime.
“Currently, companies can apply to explore any area in New Zealand,” said Parata. “The proposed approach would see the government open up a limited range of specific areas for tender.”
This would allow “focus on areas of greater potential, and will be more transparent for the public, who would know which areas are available for permitting and which are not.”
“Communities and iwi would have an opportunity to comment on the proposed areas to be opened up,” Parata said.
The approach appears intended to deal with the evidence that deep-sea exploration, in particular, is more controversial in some parts of the country than others.
While such activity is largely uncontroversial and a major industry in Taranaki, seismic surveying conducted for the Brazilian oil and gas giant Petrobras, earlier this year, sparked protest involving Greenpeace and an opposing local iwi. Permit offers off the Northland coast recently went unawarded in a move interpreted by industry watchers as indicating political caution over further protests.
Recent announcements of seismic surveys for offshore Southland’s Great South Basin, however, have sparked little such opposition.
“The new approach allows for more proactive and strategic management of the resource estate with all stakeholders,” says a flyer from the responsible Crown agency, New Zealand Petroleum and Minerals. “The current approach is primarily reactive.”
Block offers would comprise a number of basins listed in an indicative schedule for “both conventional and unconventional hydrocarbon resources.” The energy strategy document makes special mention of the government’s desire to pursue commercial uses for huge deep-sea deposits of methane-rich gas hydrates on the ocean floor within the Exclusive Economic Zone.
Block Offers would open in the first quarter of each year, with bids by August, and permits awarded by the end of the year. Industry and other stakeholders would have input opportunities as to which areas are offered.
The energy strategy reaffirms the government’s target of 90% of electricity coming from renewable resources by 2025, while stressing the ongoing importance of fossil fuels for energy security and national wealth.
“We can’t just run off the tap in our journey to a lower carbon economy,” said Parata. “We also can’t ignore the major economic opportunity that continuing global oil demand could provide New Zealand.”
Parata also released a report from Wellington investment advisers Woodward Partners suggesting forecast royalties of $3 billion from currently producing oil fields could rise to $12.7 billion with future discoveries.