Block Offer annual exploration permit tender process
The New Zealand Government allocates petroleum exploration permits in an annual tender called a ‘Block Offer’.
This enables efficient allocation of exploration acreage, incorporating the views of industry and stakeholders.
The modern Block Offer tender process has improved New Zealand’s profile among international investors. We stimulate competitive interest so we can award exploration permits to the bidder with the best work programme (and the ability to deliver it).
For the annual Block Offer tender for petroleum exploration permits, NZP&M consult with iwi, hapū and councils on proposed release areas. This can result in areas being removed from the offer or certain activities being subject to additional requirements. Release areas are then finalised and operators are invited to bid for exploration permits within those areas.
New Zealand has run annual Block Offers since 2012. We select the release areas for Block Offers based on their prospectivity and commercial interest, and from 2013 companies have been able to bid for their own block outlines based on a graticular system within each release area.
Before we announce the Block Offer we:
- ask industry to nominate areas to include in the allocation,
- consult with iwi and hapū in the proposed areas,
- discuss the proposed areas with local government (note that areas listed under Schedule 4 of the Crown Minerals Act 1991 are automatically excluded from the Block Offer).
Information gathered during consultation guides the Minister’s decision on the final make-up of the Block Offer. This helps to ensure we identify sites of cultural, historical or environmental value. A report and recommendations are then provided to the Minister of Energy and Resources.
Release area bids
The release areas are announced when Block Offer bidding opens, usually in April each year.
Once bidding closes - usually around six months later - we assess the bids based on their proposed work programme, and criteria including the applicant’s technical and financial capability and likely capability to meet expected health, safety and environmental requirements in accordance with the Invitation for Bids.
Consultation has begun on proposed areas nominated for Block Offer 2017
Energy and Resources Minister Simon Bridges has opened the Block Offer 2016 tender.
Historically petroleum exploration permits in New Zealand were granted through a priority in time (PIT) system, where operators identified an area they wanted to explore and applied for a permit. Between 2003 and 2012 New Zealand ran a number of Block Offers.