Steps to operating in NZ's offshore waters
Exploration and production activities for petroleum and minerals in New Zealand's offshore waters have been divided into six stages.
The approval process for offshore petroleum and minerals activities happens over six stages.
At each of these stages any imported vessel, rig or equipment must be approved for entry by a Ministry for Primary Industries inspector unless it has received approval to arrive, such as through development and approval of a craft risk management plan before coming to New Zealand.
View each stage in detail
1. Assessing the seabed
Operators must seek approval to search for petroleum or minerals and comply with EEZ regulations and the seismic code of conduct.
Operators and the Government carry out research into where petroleum and minerals might be found. Some seabed can be excluded from this process for conservation or cultural reasons.
If an operator wants to search for petroleum or minerals, they need to obtain a prospecting permit from New Zealand Petroleum and Minerals (NZP&M) before undertaking prospecting activities such as taking seabed samples and seismic surveying. The company’s proposed work programme and technical and financial capability are assessed. Permits last up to four years.
See the NZP&M website for more information on permits.
Prospecting for petroleum and minerals are ‘permitted activities’ under the EEZ Act. Operators are not required to obtain a marine consent provided they satisfy the conditions of the EEZ regulations, including taking all reasonable measures to avoid, mitigate or remedy any adverse effects of their activities on any sensitive environments.
Operators are required to assess their impact on the environment and develop sensitive environment contingency plans. They are required to provide post-activity reports. These documents are published on the our website.
Special conditions apply to seismic surveying. It is treated as a permitted activity under the EEZ Act on the condition that operators comply with the Department of Conservation's (DOC) Code of Conduct for minimising acoustic disturbance to marine mammals. The Code requires consultation with parties with an existing interest who might be affected by the seismic survey.
As part of the Code, an operator undertaking a seismic survey is also required to submit a Marine Mammal Impact Assessment (MMIA) to DOC. The MMIA outlines any potential impacts on marine mammals in the survey area and how the company intends to mitigate those impacts. The MMIA must be signed off by DOC before the survey starts.
Operators who don’t comply with the Code within the EEZ must go through a marine consent process instead. All current operators in New Zealand's offshore waters have voluntarily agreed to comply with the Code (as at April 2014).
There are also six marine mammal sanctuaries, which have their own mandatory seismic surveying regulations. Operators surveying in these areas must comply with these regulations in addition to the Code.
A rigorous approval process must be completed before an operator can begin the exploration process. The conditions of these consents will be monitored and enforced.
Environmental Protection Authority approval process
Operators who want to carry out activities (restricted by s20 of the EEZ Act ) that are involved in exploration drilling for petroleum in the EEZ and CS need to obtain a marine consent from the EPA.
Read the EEZ Act (New Zealand Legislation website)
As part of this process, operators must provide an impact assessment to the EPA which identifies any effects of undertaking the proposed activities on the environment and existing interests; and the measures they will take to avoid, remedy or mitigate any adverse effects
The application will be considered by a decision-making committee of experts appointed by the EPA Board. If granted, a marine consent will set out what conditions (under s63 of the EEZ Act) must be met to deal with the adverse effects of the proposed activity on the environment or existing interests. These conditions will be monitored and enforced by the EPA.
Marine consent applications for activities involved in exploration drilling are classified as non-notified discretionary under the EEZ Act. This means applications for non-notified activities will not be publicly notified. The EPA cannot consider public submissions or information provided to it. In making its decision on an application, the EPA will consider whether it needs to request further information or advice in accordance with the EEZ Act. Applicants will still be required to identify and consult with existing interest holders (including iwi authorities and Māori groups) who may be affected by the proposed activity.
Public submissions can be made on marine consent applications for the production phase of petroleum operations.
Operators wanting to drill an exploration well and discharge harmful substances from it will need to apply to the EPA for:
- a non-notified marine consent to disturb the marine environment and remove non-living material from it
- a non-notified marine discharge consent to discharge harmful substances.
In addition, the well must be securely plugged when exploration drilling is finished.
New Zealand Petroleum & Mineral approval process
Permits for petroleum exploration (that include the right to drill exploration wells) are issued through NZP&M’s annual Block Offer tender process and last up to 15 years.
NZP&M first consult with iwi and hapū and engage with councils about areas of sea (blocks) which they are thinking of making available for exploration, and considers their views. The blocks are then finalised and operators are invited to bid for exploration permits within those blocks. Bidders are assessed on their proposed work programme.
NZP&M also assesses an operator’s technical and financial capability, and compliance history, and undertakes a preliminary, high-level assessment of the operator’s capability and systems that are likely to be required to meet applicable health, safety and environmental legislation.
If an operator wants to explore for minerals offshore, they can apply to NZP&M for an exploration permit over a specific area. Applications are assessed on the same criteria as petroleum exploration, including consultation with affected iwi and hapū.
Seismic surveying can also occur during the prospecting or exploration phases. Find out what a seismic survey is and how it is regulated under the Exclusive Economic Zone and Continental Shelf (Environmental Effects - Permitted Activities) Regulation 2013
Find out about seismic surveying
Regional council approval process
Operators who want to carry out prospecting and exploration out to 12 nm need to comply with the RMA and, in most cases, obtain a resource consent if it is required by the regional council’s Coastal Plan
Learn more about Applying for a resource consent (MfE website).
Regional councils undertake a similar type of assessment of the environmental impact of the proposed activity as the EPA.
Some resource consent applications may be considered and decided by a Board of Inquiry or the Environment Court instead of a council. These applications include those directly referred to the Environment Court by the applicant (with the agreement of council), or proposals of national significance that have been referred to the Court or a Board of Inquiry by the Minister for the Environment (these are said to have been ‘called-in’).
Maritime New Zealand approval process
An operator needs to apply for approval from MNZ for their oil spill contingency plan. This will show that the operator of the oil or gas facilities has:
- minimised the risk of an accidental spill
- detailed emergency response plans in place if a spill does occur, including a well control contingency plan in case of a well blowout.
MNZ’s responsibilities for managing discharges of harmful substances and dumping of waste from offshore structures and production facilities were transferred to the EPA on 31 October 2015.
WorkSafe approval process
All operators have a duty to provide safe working places for their workforce and must comply with health and safety regulations.
Petroleum operators intending to drill a well are required to submit a safety case to WorkSafe for approval at least 90 days before starting any activity. Any hazards to safety must be identified and control measures implemented.
Well operators must make sure that working wells are independently examined throughout the lifecycle of each well.
WorkSafe and MNZ are the two government agencies with responsibility for ensuring operators involved in petroleum exploration or mining at sea comply with health and safety regulations.
Read the Health and Safety regulations (New Zealand Legislation website).
Operators need specific approval before entering the production phase. This includes a publicly notified application process for a marine consent that provides the opportunity for the public to make submissions.
If an operator has found petroleum or minerals and wants to start production, they need to apply to NZP&M for a mining permit. NZP&M will again assess their proposed work programme, their technical and financial capability, and their compliance history; and will undertake a preliminary, high-level assessment of the operator’s capability and systems that are likely to be required to meet applicable health, safety and environmental legislation.
The plan must also demonstrate maximum responsible recovery of the petroleum or minerals. Before awarding a permit, NZP&M consults again with iwi and hapū.
If the activity is to occur in the EEZ or CS, the operator will also need to obtain a marine consent through the EPA as part of a publicly notified process. This includes a number of stages – including publicly notifying the application, the opportunity for the public to make submissions, a hearing, and consideration of the application by a Board of Inquiry appointed by the Minister for the Environment.
If a marine consent is granted, it will set out what conditions are imposed to address the adverse effects of the proposed activity on the environment or existing interests. These are then monitored and enforced by the EPA.
If the activity is to occur within territorial waters, the operator may need to go through a similar resource consent process with the relevant regional council.
Operators will need approval of their oil spill contingency plan by MNZ and their safety case by WorkSafe. Operators may also need a notified marine discharge consent from the EPA to discharge harmful substances into the EEZ or CS.
4. Ongoing monitoring
Operators will be monitored and authorities will take enforcement action if any conditions are breached.
EPA/regional council monitoring and compliance
If granted, a marine consent issued by the EPA or a resource consent issued by a regional council will set out what conditions are imposed to address the adverse effects of the proposed activity on the environment or existing interests. The EPA / regional council will monitor compliance with the conditions and take enforcement action if required.
NZP&M monitoring and compliance
Operators are monitored for compliance with the conditions of their permits and must meet the conditions of agreed work programmes or their permits may be revoked.
Operators are required to attend annual meetings with NZP&M if requested and are also required to report to the Government on their iwi and hapū engagement activity.
WorkSafe inspectors maintain regulatory oversight throughout the lifecycle of a production oil rig to ensure the operator is complying with its safety case.
Rig operators must make sure that working wells are independently examined throughout the lifecycle of each well.
5. Oil spill response
In the unlikely event of a significant oil spill, Maritime NZ is the lead national oil spill response agency. Maritime NZ's oil spill response strategy sets out how an incident would be managed. Any operator who causes an oil spill is liable for all costs involved in the response. The aim is to minimise damage to the marine environment and reduce the time for recovery of affected resources.
Maritime NZ is responsible for making sure New Zealand is ready for an oil spill of any size. If the scale of an incident is beyond New Zealand’s local and national capability, Maritime NZ has a network of international organisations and companies it can call upon to assist with resources and expertise. This relationship is reciprocal – New Zealand is expected to assist our neighbours if requested. .
The Government’s oil spill response capability is funded by an industry levy – the Oil Pollution Levy – which is paid by those sectors whose activities raise the risk of a marine oil spill. In the event of an oil spill, the polluter is liable for all costs associated with the response.
Learn about the Oil Pollution Levy (MNZ website).
Authorisation is needed before steps are taken to retire a production facility. This includes providing a revised safety case for approval.
Approval is needed to remove or discard a structure depending on where it is located, either through the marine consenting process (EEZ/CS) or resource consenting process (territorial waters).
A revised safety case has to be provided to WorkSafe NZ for approval before a production facility can be retired.
Wells must be plugged according to the health and safety regulations. WorkSafe NZ has to be satisfied that the risks are identified and the right precautions taken.