New Zealand is at the start of a 40-year cycle in oil and gas exploration, beginning with at least three oil rigs drilling up to 13 holes during the year ahead, government permitting agency New Zealand Petroleum and Mining (NZPAM) says.
Minister for Energy and Resources Simon Bridges opened the annual petroleum conference in Wellington yesterday, telling the 300 delegates more than $8 billion had spent in exploration in the sector in the past six years, and that $300 million in corporate tax and $400 million in royalties had been reaped in the past calendar year.
''If any one of the other 17 basins have the same [oil and gas resources] of Taranaki, that would be a game changer for the sector,'' Mr Bridges said.
Mr Bridges announced formal consultation was starting today for the 2014 block tender offer, which includes the combined Great South and Canterbury Basins, Pegasus Basin off the Wairarapa coast, the Reinga and Northland Basins in northwest New Zealand, the New Caledonia Basin and the offshore Taranaki Basin. Mr Bridges' message was similar to the one he expressed at a recent mining conference in Nelson but the potential profits are higher, oil and gas providing almost three times the returns.
The successful applicants in the 2013 block offer will be announced next Thursday, while the 2014 offer will start consultation with regional authorities and iwi, tenders closing by the end of November and successful applicants announced in April next year.
There were 21 nominations for areas from 11 companies.
''New Zealand has a large number of opportunities. Demand for oil and gas has never been better,'' Mr Bridges said.
There had been a surge in export receipts of crude oil since 2008, which had underpinned a tripling of petroleum exports, he said.
There would be ''significantly more'' investment in the sector by the Government, Mr Bridges said.
He highlighted technical data collation work by NZPAM, which has had boosts to its budgets, and its availability, and said the relatively new High Hazard Unit of the Government could expect to see its budget boosted from $50 million to $80 million.
With New Zealand having had only one basin, Taranaki, of its 18 basins explored,
the country's 6 million sq km were ''underdeveloped'', something the Government wanted to see changed, Mr Bridges said.
In an interview later, Mr Bridges acknowledged environmentalists were raising concerns, especially with regard to deep-sea drilling, such as has been proposed around Otago.
Recent regulatory changes targeted safer work practices and worked to ensure companies were capable of carrying out exploration safely, he said.
On the question of non-notification of resource consent applications, Mr Bridges defended this lack of public consultation, noting non-notification covered only exploration and if production from a hole started, it would be publicly notified.
''It is about finding a balance of the risks ... The consenting process should not be taking years,'' Mr Bridges said. For example, Bathurst Resources' consents had been tied up for two years by legal challenges, he said.
Also potentially contentious would be projects of national importance being singled out for special fast-tracking, he said.
Asked where ''the line in the sand'' was with regard to overriding public opinion and fast-tracking a project, Mr Bridges said all relevant criteria would ''ultimately'' end up with the Environmental Protection Authority (EPA).
NZPAM general manager David Binnie said New Zealand had begun to ''build momentum'' in the past two years, test well numbers per annum rising from 37 in 2009 to 45 in 2010 to 52 in 2011.
While the industry was ''lifting its game'', only Taranaki had been targeted, and the scope had ''the potential to be much bigger'', 2014's offer being the five offshore and three onshore blocks.
Many legislative and regulatory changes were under way, Mr Binnie said.
''We're setting this up for long-term success.
''It's a 40-year cycle - we're on the edge of a new resources era,'' Mr Binnie said. Critical to success was responsible development, which would involve raising environmental and health and safety standards, Mr Binnie said.
