PEPANZ executive officer Mike Patrick told EnergyReview.net from Wellington that the organisation was discussing a range of measures with Crown Minerals, including ways of attracting offshore drilling rigs to the country for sustained exploration programs. Crown Minerals is the government unit responsible for administering and licensing New Zealand’s petroleum estate.
“It’s great to see Crown Minerals keen to work alongside the industry, looking for any investment barriers that can be removed or reduced to facilitate exploration investment activity and, among other things, making marginal discoveries viable,” Patrick said.
New Zealand is far from major exploration and production service centres and costs of bringing in rigs are high.
At the 2006 NZ Petroleum Conference in Auckland early last month, Australian Worldwide Exploration asset manager Eric Matthews said the world offshore rig market was becoming so tight that contractors were now insisting that potential customers commit to a minimum one-year contract. Such a $US100-200 million ($A136-273 million) commitment was beyond any single player in New Zealand.
Crown Minerals group manager Adam Feeley said his organisation would have an open mind to any PEPANZ proposal, even in procuring government underwriting of sustained offshore rig programs if several joint ventures agreed between themselves and with the government, to coordinate exploration activities.
However, changes to fiscal regimes, including further royalty rate differentials for gas exploration, could take some time to implement, he said.
“There are already some specific ideas, a number of which are straightforward and could be taken onboard quite quickly, while others would require some legislative changes that would take longer,” Feeley told EnergyReview.net.
“The next step is to build up a set of proposals, in consultation with the industry. I think Crown Minerals should lead these discussions and bring in such government departments as Treasury and the Inland Revenue Department.”
Measures mooted so far included streamlining the Crown Minerals Act; having no minimum work program conditions on block offer bids; timing blocks offers to coincide with main exploration seasons; government funding of more seismic and non-seismic work; and a study into “tight gas” in New Zealand.
However, Feeley said petroleum industry players in New Zealand also needed to work more closely.
“There needs to be better cooperation between the industry itself as there are reasonably divergent views regarding what would make the biggest impact,” he said.
