Petroleum exploration permits for 2012 awarded

Tuesday 11 December 2012, 4:53PM

By Phil Heatley


Investment in oil and gas exploration will receive a significant boost with the award of 10 exploration permits, announced by Energy and Resources Minister Phil Heatley today.

Seven of the 10 Block Offer 2012 permits are in the Taranaki Basin, two in the Pegasus Basin and one in the Great South Basin. The permits are equally divided between onshore and offshore areas.

“Strong interest in the Block Offer 2012 permitting round proves that New Zealand is a key destination for both domestic and international investment in oil and gas exploration.

“We had bids from the Netherlands, Austria, Canada, the US, Australia and Japan, as well as domestic company interest,” Mr Heatley said.

“This is essential if we are to realise the potential of our petroleum resources for the benefit of the whole country.

“The oil and gas industry in Taranaki contributes $2 billion to our GDP and provides over 5,000 jobs. Other areas can follow in Taranaki’s footsteps,” he said.

Five-year exploration permits have been awarded to the following companies or consortiums:

  • Anadarko: two permits in the Pegasus Basin
  • Shell, OMV and Mitsui: one permit in the Great South Basin
  • Todd Exploration and Cue Taranaki: one offshore Taranaki Basin permit
  • New Zealand Oil & Gas: one offshore Taranaki permit
  • Cheal Petroleum and East West Petroleum: three onshore Taranaki permits
  • TAG Oil: one onshore Taranaki permit
  • New Zealand Energy Corporation and New Zealand Oil & Gas: one onshore Taranaki permit.


“Where there was competitive interest, we were able to award the permit to the best bidder – that is one of the benefits of the block offer approach,” said Mr Heatley.

“Collectively the permits represent committed work programme expenditure of $82 million, which, if initial work is successful, could lead to the expenditure of a further $776 million within five years.

“It’s pleasing to see ongoing development of portfolios by established operators including big players such as Shell, OMV and Anadarko. I’m also pleased to welcome a new international player to New Zealand – Canadian-based East West Petroleum, who have partnered with TAG Oil subsidiary Cheal on three permits in the Taranaki Basin.”

The permits support the Government’s aim for more strategic management of known and potential reserves.

“The aim is for New Zealand to have an economically sustainable industry that supports the local economy and our international competiveness for the foreseeable future,” Mr Heatley said.

“This means realising the full potential of our one producing basin – Taranaki – and exploring new frontier basins that may support this country in years to come.

“The award of two permits over the previously unexplored Pegasus Basin and another in the Great South Basin confirms the potential prospectivity of New Zealand outside Taranaki.

“This is the first full year of the annual block offer and we will continue to use this system in 2013 and beyond.”

Information on the permits awarded and the Block Offer 2012 process is available at


In 2012, the Government moved to exclusive use of annual block offers to plan, consult on and promote petroleum exploration in New Zealand. This replaced the previous first-in first-served (Priority in Time) approach.

Following consultation on 25 proposed blocks, the Government tendered for 23 blocks between June and October 2012.

Twenty-four qualifying bids were received over 13 of the blocks offered. These bids were evaluated against a number of criteria including the proposed work programme and the technical and financial capability of the bidders to give effect to that programme.