Exploration ban challenged in High Court

Greymouth Petroleum, the second-largest New Zealand-based oil and gas producer, has started court action challenging the Government's plan to ban offering new offshore exploration permits.

The company, whose assets include the onshore Turangi, Onaero, Kowhai, Radnor and Ngatoro gas fields, said the Government's April 12 announcement halting further offshore block offers was unlawful.

Chairman Mark Dunphy said the Crown Minerals Act required the Government to consult on any planned changes, which it had not done. And the recent proposal by Energy and Resources Minister Megan Woods to sustain activity by extending drill-or-drop deadlines for existing permit holders risked adding to the "clouded muddle" of process explorers and producers now faced.

He said reduced production from the Pohokura field earlier this year, and now, showed how little redundancy there was in the country's gas supply.

"I think people are coming to terms with the real problem, which is that New Zealand is short of gas."

Greymouth's High Court claim against the Crown was disclosed in the Crown Minerals (Petroleum) Amendment Bill the Government is rushing through Parliament. The public have until October 11 to submit on the Bill.

The Government has said the ban is part of its climate change strategy and will ensure a long-term transition away from fossil fuels. Ms Woods believes the existing 100,000sqkm of exploration acreage is sufficient to ensure long-term gas supplies.

Government officials advised against the ban, saying it was likely to result in an increase in emissions long term as locally produced methanol, urea and steel was replaced with overseas product, often from countries and industries using coal rather than gas.

Greymouth filed its claims with the High Court in April. The case was unlikely to be heard this year, Mr Dunphy said.

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