23 oil, gas exploration permits up for tender

BUSINESSDESK: The Ministry of Economic Development has put 23 exploration blocks, mainly offshore, up for tender in its annual tender round.

The government department is looking for companies to explore the onshore and offshore areas from 2013. The blocks cover over 40km of offshore seabed and 3km of land in the Waikato, Taranaki, Tasman, the West Coast and Southland.

Tenders close on October 15.

"The blocks cover a number of petroleum basins and a variety of environmental settings and resource types to attract a range of potential explorers with different expertise and interests," David Binnie, general manager of New Zealand Petroleum & Minerals, said.

The tender process follows consultation with iwi and local authorities over the proposed blocks.

The ministry deferred two onshore Taranaki basin blocks, while a number of other blocks have been revised in shape or had conditions attached.

The ministry said it working to have a better relationship with with iwi and local authorities in the lead up to the tender process to improve the way resource developments are managed.

The latest permit round comes in the same week that the Wellington High Court has been hearing and attempt by East Cape iwi and Greenpeace to overturn oil exploration licences granted to Brazilian oil giant Petrobras, claiming the Crown breached its Treaty of Waitangi obligations and failed to carry out a proper environmental assessment.

"We expect gas and oil companies to give high regard to the importance of engaging locally," Mr Binnie said.

"The expectation for engagement with the iwi and hapu has been set out in the terms and conditions of the competitive tendering process."

In May, New Zealand Oil & Gas paid AGL Upstream Gas $US3 million to boost its stake and takeover as operator at Taranaki permit, Kaheru. NZOG lifted its stake in the permit to 60% from 15%. The remaining 40% is held by Canadian second-tier oil explorer Tag Oil.

An exploration permit is the first required by operators to develop Crown-owned minerals. Should commercially viable reserves be discovered during exploration, a resource can take up to 50 years to produce, the ministry says.