The program will now take effect from January 1, and Duynhoven says 2005 represents “a watershed” for NZ exploration.
“We have taken major decisions in 2004 to prove that there is life after Maui in terms of gas exploration in New Zealand," hhe said.
"While exploration is an inherently uncertain industry, an improved regulatory regime, incentives to explore and three major blocks offers in frontier basins combine to make it an ideal time for new explorers to come to New Zealand.
"Considerable work has been undertaken during 2004 to develop a regulatory regime which would encourage both domestic and international petroleum exploration and production companies.”
New Zealand had already been highly ranked as financially competitive for petroleum exploration and the new changes would bring this country “into the top 10 countries worldwide for competitiveness.”
The 2005 program established a petroleum regime that promoted the responsible discovery and development of New Zealand’s petroleum resources which contributed substantially to national economy, he added.
Among the changes introduced by the new program are: reduced royalties payable on new exploration discoveries made between July 2004 and December 2009; the introduction of a new definition of “discovery” for the purpose of royalty eligibility; and the simplification of the procedure to process for flaring and venting
Duynhoven said the program was the outcome of extensive consultation with the petroleum and electricity industries, Maori and others in government.
“It provides a structure that will ensure the continued efficient allocation of rights to explore and mine for petroleum, and a fair financial return to the Crown as owner,” Duynhoven concluded.
But some in the NZ exploration industry are aghast at Crown Minerals’ narrow definition of “discovery” that will exclude the recent Radnor discovery, the Cardiff-2 well presently being drilled and, it seems, most onshore and offshore wells in any petroleum basin if they are targeting already known prospects or structures.
