The Crown Minerals Act 1991 requires the Minister of Energy to issue minerals programs and review them within 10 years and issue replacement programs. The current Minerals Program for Petroleum, which was issued on 1 January 1995, has been reviewed and a draft replacement Minerals Program for Petroleum has been prepared. The Act provides for public consultation on the draft replacement program and copies will be available for distribution tomorrow.
"The replacement program will ensure the continued efficient allocation of rights to prospect, explore and mine for petroleum, and a fair financial return to the Crown as owner," said Mr Duynhoven.
"The draft program released today proposes a petroleum regime which promotes the responsible discovery and development of New Zealand's petroleum resources that contributes substantially to our economy," said Mr Duynhoven. "It builds upon the knowledge and experience gained in the ten years since the current program was issued. It will provide increased certainty and transparency in administering the Crown Minerals Act which will strengthen the confidence of exploration companies in investing in New Zealand."
The replacement program provides for competitive and 'priority in time' permit allocation, with some adjustments to procedures to improve administration and the attractiveness of exploration permits in less explored areas. "It also includes new royalty provisions to reflect the government's announcement earlier this month that are designed to encourage increased petroleum exploration," Mr Duynhoven explained. "In short these are to reduce the Ad Valorem Royalty payable on gas, to reduce the Accounting Profits Royalty payable on all petroleum for a given quantity of production onshore and offshore, and to remove the ringfence for deducting exploration expenditure for the purposes of calculating the Accounting Profits Royalty".
Mr Duynhoven added that, "Despite recent discoveries and increased exploration activity, there still remains a significant shortfall in reserves to replace Maui. We need further investment in exploration now to locate new fields capable of meeting post Maui demand."
Public submissions are now called for on the Draft Replacement Minerals Program for Petroleum. These should be forwarded by 20 August 2004 to the Chief Executive of the Ministry of Economic Development, c/o Manager Petroleum and Minerals Policy, P O Box 1473, Wellington.
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