NZ Sees Change in Tendering for Oil and Gas Concessions

Keen to change the existing norms of oil and gas exploration permits, New Zealand will offer from next year around 30 blocks annually for competitive tender on the international market.

The move announced by the country's acting minister of Energy & Resources Hekia Parata on Tuesday, envisages opening up of a limited range of specific areas for tender by the government as against the current system that enables the companies to apply for exploration permits in any area of New Zealand.

A panel entrusted with the task of selecting the best applications and applicants for each block will assess their technical and financial capabilities besides the proposed work programme.

The blocks will be up for grab in the first quarter of each year, followed by receipt of bids in August and the award of permits by the year end.

Significantly, industry participation will be welcome for nomination of blocks prior to offer of each block which stands to be evaluated for future offers, the government said.

“The new approach will enable us to focus on areas of greatest potential, and provide transparent picture to the public revealing areas available for permitting and those that are not,” Parata said.

The new proposal which coincided with the release of the country's Energy Strategy, has set a target of 90% electricity generation from renewable sources by 2025. But the changes will not see the government veering off its commitment to oil and gas exploration.

“We can’t just close the tap in our journey to a lower carbon economy,” Parata clarified.

An independent report released by the government on Tuesday showed New Zealand is poised to earn more than NZ$3 billion (US$2.6 billion) in royalties from oil and gas fields already in production and the  same could increase to NZ$12.7 billion with future discoveries.