Block Offer 2013 Permit Awards

Your Excellency Michael Potts, Australia’s High Commissioner to New Zealand;

Your Excellency Peter Chan, Singapore’s High Commissioner to New Zealand.

Ladies and gentlemen.

Good morning.

As Minister of Energy and Resources, it’s my pleasure to welcome and host you here in Parliament this morning to award permits for the Government’s second annual Block Offer.

Many of you were in Auckland earlier this year when I announced the areas available for competitive bidding in Block Offer 2013.

At the time the Prime Minister and other key speakers talked about the ‘opportunity’ that New Zealand offers.

In oil and gas terms, New Zealand is a nation of real opportunities. 

But to make the most of our opportunities we need to explore.

Fundamentally, that’s what today is about – exploring an under-explored country.

This Government is committed to developing our resources in a sensible, safe and environmentally responsible way and the oil and gas sector offers our country one of our most significant prospects for growth.

Petroleum is already a significant contributor to our economy. 

Oil is our fourth largest commodity export after dairy, meat and wood, contributing more than $2.5 billion to GDP each year.

The petroleum and minerals sectors are the most productive in our economy. Together, they generate $333 per hour worked, compared with the New Zealand average of $48 per hour.

Internationally, we are recognised as one of the world’s most promising regions for petroleum development, but we have barely scratched the surface of our potential.

To date all oil and gas production has come from just one of New Zealand’s 18 basins – Taranaki.

If any one of our other 17 basins has anything like the success of Taranaki, it would be an economic game-changer for our nation.

I’m excited by the level of activity underway in the industry, both on and offshore. Expenditure in the sector is at historical highs; in 2012 alone nearly $1.5 billion was invested in exploration and development.

The 2013/2014 season will be one of the busiest and sustained periods of oil and gas exploration the country has ever seen.

Offshore, we have multiple rigs and seismic surveying vessels working in our waters, major field development and extension programmes well underway, and exploration activity in some of our frontier basins. 

Onshore, exploration continues apace with at least 30 onshore wells being drilled.

It’s clear to me and many others that we are starting to hit our stride.

The changes to the Crown Minerals Act regime that came into force this year supports this growing momentum.

We have strengthened regulatory agencies’ coordination on health, safety and environmental matters, as well as ensuring our efforts are proactive and focused on operations that have the highest technical and geological complexity.

These changes give clarity, certainty and confidence to companies with regard to what is expected when working in New Zealand.

As a Government, we have upped our game and the results are starting to show. 

Block Offer 2013 has built on last year’s success and New Zealand is now firmly on the map as a key destination for oil and gas explorers. 

I’m delighted to announce that we have 10 exploration permits to award to operators for Block Offer 2013.   Five onshore and five offshore. 

Collectively these permits have a committed work programme expenditure of around NZ$62 million - a significant boost to investment in New Zealand.

If that work is successful, it could lead to further expenditure of up to $720 million within five years.

Let’s run through some of the key successes.

There are permits awarded in every block or area that we offered in Block Offer 2013. 

I understand from officials that the applications included high quality work programmes targeted to specific acreage – which is exactly what we wanted to see from bidders.

Three new international players have entered New Zealand’s oil and gas scene.  This underpins the growing confidence international companies have in our industry. 

I’m excited that this year’s outcome will see exploration in Reinga-Northland – one of our most promising frontier basins.

I’m also really encouraged to see further commitment to exploration of the Great South Basin, and, of course, the continued interest in Taranaki.

These results are another step in the right direct for New Zealand’s oil and gas industry. 

Our activity and momentum continues to build and I am certain that today’s announcements will not go unnoticed internationally.