New Zealand unveils new approach to allocating oil and gas exploration rights

Source: New Zealand Petroleum & Minerals

The oil and gas regulatory group New Zealand Petroleum & Minerals has developed a new approach to allocating petroleum exploration rights that will assist in giving effect to the Petroleum Action Plan. 

The objective of the Government’s Petroleum Action Plan is to maximize the return to New Zealand from its petroleum resources. 

The new approach will exclusively use the competitive Block Offer method for the allocation of petroleum exploration rights. This is in contrast to the current approach which primarily uses the first-in, first-served “priority in time” method. A proposed change to the Crown Minerals Act will result in the priority in time method no longer being available in New Zealand.

The new approach allows for more proactive and strategic management of the resource estate with all stakeholders, whereas the current approach is primarily reactive. 

From 2012, New Zealand Petroleum & Minerals will publish annual Block Offers. Approximately 30 blocks will be delineated and made available for competitive tender on the international market. A New Zealand Petroleum & Minerals evaluation panel will select the best applications and applicants for each block based on technical capability, financial capability and proposed work programme.

Industry will be invited to formally nominate blocks prior to each Block Offer, and if evaluated as appropriate the block/s will be considered for future Block Offers.

Other stakeholders will have the opportunity to provide input prior to decisions on where and when acreage will be offered.

The new approach would see the Block Offer process opening in the first quarter of each year, followed by receipt of bids in August and the award of permits by the end of the year. Similar approaches are successfully employed in other jurisdictions, including Australia, Vietnam, India and Indonesia.

Successfully launching the new approach will reposition the New Zealand oil and gas sector to the international market and should attract significant additional investment to New Zealand while providing Government more control over where, when, and to whom exploration rights are granted.



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