The 2012 petroleum exploration block offer saw 10 permits awarded to seven companies and consortia. The successful bids represented a total of $82 million committed to exploration in New Zealand, with a further $776 million possible during the next five years. This met New Zealand Petroleum & Mineral’s targets and paved the way for successive block offers.
The new annual block offer regime replaced sporadic regional offers and the reactive first-in, first-served priority in time (PIT) scheme that allowed anyone at any time to apply for any land in New Zealand’s territory.
Explorers can now make regular competitive applications for acreage and permits will be awarded to companies with the best business case including consideration of their health, safety and environmental records.
One of the key changes in the new regime is the increased engagement NZP&M now undertakes with key stakeholders, particularly iwi and the wider public, working through local government.
Where previously those groups felt they were not adequately consulted, under the annual block offer process they have opportunities for face-to-face meetings and to request areas for exclusion or for active protection.
Between February and April 2012 NZP&M consulted on 25 proposed blocks. It took its learnings on board before finally offering 23 blocks in June. Once finalised, it was transparent about what areas were available for exploration and those that were not; unlike the PIT regime. Information on the block offer was made available through NZP&M and meetings were held with local government and iwi in affected areas.
Under the new block offer process, communication was a critical element of the process, one example being responding to local concerns about marine mammal protection and oil spill mitigation in the Pegasus Basin. Marine mammal tourism is a cornerstone industry to Kaikoura.
NZP&M communicated with the council and community around a new improved regulatory regime and measures in response to the concerns they raised. Getting information out there about the sector including health, safety and environmental protections is vital to allow for informed debate and awareness of potential risks and benefits.
Block Offer 2012 came in under budget and was delivered on time in December 2012. This included trade missions to the United States, Australia and Singapore as a productive, efficient and effective way to get in front of investors and put the spotlight over New Zealand in this global arena.
In all, the successful launch of Block Offer 2012 repositioned the New Zealand oil and gas sector to the international market and attracted significant additional investment to New Zealand while providing government greater control over where, when, and to whom exploration rights are granted.
It enabled ongoing development of portfolios by established operators including Shell, OMV and Anadarko and welcomed a new international player to New Zealand – Canadian-based East West Petroleum.
The Energy Project of the Year award is sponsored by ITL.