Government to expand Crown MineralsEnergy and Resources
Energy and Resources Minister Gerry Brownlee announced today that the government will be strengthening its commitment to the oil and gas sector by creating a larger and more high profile Crown Minerals Group within the Ministry of Economic Development.
Mr Brownlee said the petroleum estate is one of the most valuable assets in the Crown's portfolio and it was important it was well managed.
The Crown received $450 million in royalties from petroleum in the 2009/10 financial year, and $540 million in 2008/9.
"The new unit will have a much more commercial and strategic approach that better meets the needs of both industry and the government," Mr Brownlee said.
"There will be a substantial increase to the number of staff in the unit so it has better access to the requisite commercial and technical skills.
"The unit will be a key driver of an integrated petroleum investment strategy based on geoscience knowledge and promotion investment, which the government is developing.
"An advisory board will be established to oversee the unit, with a range of technical and commercial perspectives to support the development and management of New Zealand's petroleum and minerals resources."
The expansion of Crown Minerals comes after an independent review found a significant increase in the Crown's capability is required in order to deliver on the objectives of the Petroleum Action Plan, as well as the government's objectives for the development of other mineral resources. Crown Minerals' increased capacity will be achieved by re-prioritisation of existing Ministry of Economic Development functions.
Mr Brownlee made the announcement during his opening address to the New Zealand Petroleum Conference, which is being held in Auckland this week.
The conference has brought together international experts, local industry, government decision-makers and officials to discuss the role the petroleum sector could have in transforming the New Zealand economy.
"New Zealand has the fourth largest exclusive economic zone in the world, with 15 recognised basins that are potentially capable of producing hydrocarbons," Mr Brownlee said.
"Currently only the Taranaki basin has producing fields - and exports of oil, condensates and the other products of petroleum production from that basin are the fourth highest export earner for the country.
"Recognising the potential that further discoveries could have on the economy, this government is committed to the responsible development of New Zealand's petroleum resources."
The Petroleum Action Plan was announced in November 2009 and sets out the government's commitment to ensuring the potential of New Zealand's petroleum resources are realised.
Mr Brownlee said good progress had been made in the last 10 months on various elements of the plan, including:
- A discussion document proposing changes to update, streamline and future-proof the Crown Minerals Act 1991 is currently out for consultation.
- Submissions on a paper setting out options for improving the quality of information on petroleum resources have now been received. Decisions are expected to be announced before the end of the year.
- An initial review of the royalty and taxation regime shows that it is generally fit for purpose. On this basis the government is not proposing to make any major reforms to the regime.
"The government is taking active steps to unlock our petroleum potential through the Petroleum Action Plan. The goal is to increase exploration and production investment," Mr Brownlee said.