Govt risks Maori wrath with oil and gas exploration offer

By Pattrick Smellie

Nov. 8 (BusinessDesk) - The government is offering up a huge swathe of offshore Northland acreage for oil and gas exploration in a move that is sure to test a new iwi consultation protocol intended to minimise Maori protests against oil exploration, such as occurred off East Cape early last year.

Energy Minister Phil Heatley unveiled the proposed areas to be included in the 2013 "block offer" tender process, seeking expressions of interest from oil and gas explorers for acreage in five offshore areas: the Taranaki, Northland, Reinga, Canterbury and Great South Basins.

The Northland and Reinga basins stretch from north of Cape Reinga down the western side of the North Island and have long been identified by government geologists as having significant potential for oil and gas discoveries.

Shane Jones, a senior Labour Party Maori MP who hails from the north, welcomed the move, but predicted Mana Party leader Hone Harawira would "go off like an inflated balloon" on the issue, which has already attracted strong opposition from local environmental groups, including some Maori.

Jones said Labour supported the move in principle.

"Cape Reinga is very important in Maori mythology but the mining is a hang of a long way away from the Spirit Tree," he said. "My position: subject to observing the statutory framework, get on with it.

"The model more of us will be promoting is that Taranaki remains intact and has done economically well from the positive spillover from that industry."

Maori MP's and iwi leaders received briefings on the proposed exploration areas last night, ahead of today's public release. A detailed consultation will now occur with iwi and affected local councils until January 30, before a final decision about which areas to offer formally next April. Bids will be due from explorers by September 30 30, with decisions on allocation in December.

This is the second bidding round under the new block offer process, in which the government identifies areas it wants explored instead of waiting for explorers to seek acreage.

This time around, the process will see careful official adherence to guidelines, currently issued in draft form, which specify how iwi and local government consultations should occur. Other stakeholder groups are not covered by the guidelines, which are intended to respond to Treaty of Waitangi obligations and legal risks if adequate consultation is not deemed to have occurred.

The environmental lobby group Greenpeace and an East Cape iwi, Te Whanau a Apanui, tried in the High Court earlier this year to have an exploration licence covering part of the Raukumara Basin, offshore from East Cape, invalidated on the grounds of inadequate consultation.

While that bid failed, sensitivity to Maori concerns was heightened by last year's Raukumara protests, which involved naval surveillance of a protest flotilla during seismic surveys for the Brazilian oil giant Petrobras, as well as the court bid.

Bidders will be able to express interest in up to 10,000 square kilometres of exploration acreage in the so-called frontier basins, while blocks will be limited to no more than 2,500 square kilometres offshore Taranaki, New Zealand's only mature offshore hydrocarbons area.

Limited onshore acreage is also being offered, including further onshore territory in Poverty Bay, where local opposition, including an iwi element. Canadian and American companies TAG Oil and Apache Corp are exploring unconventional shale deposits for recoverable oil and gas.

Locals fear such deposits will require use of the controversial hydraulic fracturing, or "fracking", technology, which is subject to an investigation by the Parliamentary Commissioner for the Environment.

The PCE's report is due late this month, along with a report prepared for the Ministry of Business, Innovation, and Employment on the economic potential of the oil and gas deposits known to exist onshore in the Hawke's Bay and Poverty Bay regions.

(BusinessDesk)

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