Operators will be able to apply for new petroleum exploration permits as early as September following the third reading of the Crown Minerals Amendment Bill, Resources Minister Shane Jones says.
The Bill removes the ban on oil and gas exploration beyond onshore Taranaki, better aligns decommissioning settings with international practice, establishes a new tier of permit to undertake small-scale non-commercial gold mining, and signals the Coalition Government’s intent to reinvigorate investment in Crown-owned minerals.
'This Government is pragmatic about the vital role natural gas will play in our energy mix in the decades ahead and we have set a course for greater energy security backed by our own indigenous reserves,' Mr Jones says.
'The ill-fated exploration ban in 2018 has exacerbated shortages in our domestic gas supply by obliterating new investment in the exploration and development needed to meet our future gas needs. Reserves are also falling faster than anticipated.
'New Zealanders are bearing the brunt of this constrained gas supply, and energy security concerns are impacting investor sentiment. These factors are taking a toll on our economic growth and prosperity.
'We are seeing businesses in the regions closing as a result with Kiwis losing their jobs, and we’re importing hundreds of tonnes of Indonesian coal to meet peak energy demand.
'This legislation is just one of many actions we are taking to get the right settings in place to resuscitate sector confidence, shore up energy supply and protect electricity affordability.'
During the progression of the Bill, a gap was identified in the existing Crown Minerals Act that relates to liability for the costs of decommissioning petroleum infrastructure. In certain circumstances, parent companies of permit-holders could sell their shares without remaining responsible for the costs of decommissioning old petroleum infrastructure, exposing the Crown to fiscal risk.
'Together with changes to the decommissioning regime that better balance regulatory burden and risk to give operators the clarity they need to invest in exploration and development wells, we have introduced ministerial discretion to assign liability for decommissioning costs to former permit-holders and others who have held interests in a permit,' Mr Jones says.
'We recognise that a one-size-fits-all approach for every scenario not only erodes investor confidence, it also doesn’t allow us to best manage risk.
'I want those who benefited from having an interest in a petroleum permit to pay for decommissioning the relevant infrastructure. While financial securities remain at the core, the new approach to assigning liability will ensure the most appropriate person will remain responsible for costs if the current permit-holder cannot meet their obligations and financial securities are insufficient.'
Most of the changes through the Bill will take effect immediately, while others will require staged implementation and secondary legislation. All changes will be operational by the end of September 2025.
For more information, see 2024 Proposed amendments to the Crown Minerals Act 1991 | Ministry of Business, Innovation & Employment (mbie.govt.nz)
Source: Beehive.govt.nz
