By Andrew Hobbs

EXPLORERS and producers have the opportunity to bid on new exploration areas in New Zealand, as the government process for awarding oil and gas permits continues.

Consultation with iwi and local authorities is underway over four proposed offshore areas and one proposed onshore area, covering about 537,000 square kilometres.

New Zealand energy and resources minister Simon Bridges said this was an essential first step in the block offer process.

“The feedback from these groups ensures that any areas of sensitivity are carefully considered before the tender round is finalised.”

“I have also instructed officials to begin engagement and information-sharing with iwi, hapū and local authorities in Southland,” he said.

“Following this process, I will consider including parts of onshore and offshore Southland in future block offers beyond 2016.”

Mr Bridges said the government would seek investment from experienced and capable oil and gas industry operators in bidding on the areas that were up for grabs.

“Successive block offers have shown that operators are looking for long-term opportunities in a mix of mature and frontier acreage, which New Zealand has to offer,” he said

Chief executive of the Petroleum Exploration and Production Association of New Zealand (PEPANZ), Cameron Madgwick, told Oil & Gas Australia there had been a focus on securing a variety of operators – from supermajors, regional majors and existing players – to participate in the block offer process.

“I am pretty certain that will be the target again – how successful that is, who really knows,” he said.

“I would expect as a result of the low oil price environment that the work programs that are bid as a part of the block offer process, those will be a bit more long dated – the various activities that are bid, one would expect that people would bid to push out the timeframes for that.”

The areas within the blocks that are to be allocated to various companies would be determined partly through consultation with the general public, the geoscience community and with industry.

“Certainly in industry if they have a preference for the neighbouring block because of what they think they are seeing, you can imagine that they would be agitating strongly for those to be included as well,” Mr Madgwick said.

Interest from operators remained strong, he said, with prospectivity found in a number of New Zealand basins, particularly those in deepwater areas.

“Geoscientists say when they look at the analogues there are some really promising features there that they are looking at,” he said.

“You don’t want to come here unless there is a good chance of finding something, and all of the indicators are that there is high prospectivity here.”

Multiclient groups and the government itself were helping to boost this interest through the generation of new seismic datasets, he added, providing new information for potential operators to work from.

“The supplier side, the services sector is well developed – all the names that you would expect to be there to help you with your development are here,” he added.

In addition, Mr Madgwick said PEPANZ tended to receive a good hearing from government when it presented any concerns to them.

“There is always opportunities to optimise the regulatory environment to make it as efficient as it can be – the balance is about right, if I am honest, but there are always areas here and there which you would like a bit of a tweak on,” he said.

“Like the industry in most parts of the world, we are not about having a lower standard, we are not advocating for lower standards on anything, we are trying to make it optimal and efficient.”

“We want the right regulators, well-staffed with the expertise they need to provide the general public with the reassurance that they need.”

Connecting with the New Zealand public was also a challenge for PEPANZ, as it is across the world, though Mr Madgwick said the group had found through polling that while the general population was open to hearing a message from industry, there was little available.

“What that really translates to is the industry needs to find new and different ways to speak the language of communities, rather than the language of industry,” he said.

“We pride ourselves, rightly so, on our safety standards, and we will go chapter and verse into how fantastic we are at it… but to Mum and Dad sitting at home worrying about what they are going to have for dinner it is a pretty nonsense message.”

“At the top level, what they really want to know is that you are careful – so why don’t you just say that?”

“So we are trying to speak a little bit differently to communities – yes, we will go into the detail about how all those activities occur, why we explore for the products, why it is important to solve that energy trilemma the world faces, but also when we speak about how we do it we want to say we’re careful,” he said.

The consultation period for the 2016 block offer runs until 30 October 2015, with the final tender areas to be announced in March next year.