Associate Energy Minister Harry Duynhoven announced the new blocks offer today, saying the seven new blocks brought the total number of blocks on offer to 19 – “a record number in New Zealand at any one time”.
It was likely another blocks offer would be announced before the end of the year.
“With oil prices at record levels it is important that we maximise the potential for new exploration investment, and we have done this through the course of the year with a broad range of opportunities in both developed and frontier petroleum basins," Duynhoven said.
"Unlike recent announcements in frontier basins, the new blocks were in a well-explored region and I therefore expect a high level of interest from both domestic and international petroleum explorers.
"Several of these permits are close to proven fields such as Kupe, Maui and Pohokura, and so the prospectivity of the region is already established.”
The decision to allocate the blocks by way of a competitive bidding process was a deliberate departure from the previous “first-in-first-served” Acceptable Frontier Offer (AFO) policy that had applied in past years.
“There is a need to find new oil and gas discoveries quickly," Duynhoven said.
"We must ensure that acreage is awarded to explorers who are prepared to do the best and most aggressive exploration.”
The New Plymouth MP said the latest blocks offer was also a Crown Minerals response to industry expectations that expired or relinquished permits would be “recycled” as quickly as possible to ensure continuity of exploration in areas with recognised potential.
“In addition to a major announcement next month regarding the Great South Basin, we will continue to allocate exploration blocks in the coming months whenever a new opportunity arises," he said.
"There will be ongoing consideration of further options to stimulate exploration in New Zealand to complement recent government initiatives. These options would be developed in discussion with a range of explorers."
Bidders must, among other things, submit proposed minimum work programs for their desired acreage, with three options open to them.
Option One: Within six months existing seismic data will be reprocessed and a commitment to acquire new seismic will be made (or the permit surrendered). Within 18 months, the new seismic data will be acquired. Within 24 months a commitment to drill at least one exploration well will be made (or the permit surrendered). And within 36 months, an exploration well shall be spudded.
Option Two: Within 12 months new seismic data will be acquired. Within 24 months, a commitment to drill at least one exploration well will be made (or the permit surrendered). And within 30 months, an exploration well shall be spudded.
Option Three: Within six months a commitment to drill at least one exploration well will be made (or the permit surrendered), and within 24 months an exploration well will be spudded.
Bids for the new offshore Taranaki-Wanganui blocks close next February 17.
