Rich lister sues Energy Minister and coalition over oil and gas moves

Thursday, 27 September 2018

Prime Minister Jacinda Ardern says the end to oil exploration is for future generations.

A New Zealand-owned oil and gas company is suing the Government over its moves to end new oil exploration permits.

In a statement, Greymouth Gas, a company owned by Greymouth Petroleum, said it had filed claims in the High Court 'challenging decisions made by Energy Minister Hon Megan Woods and the Ministers of Government coalition parties.'

According to the company, Prime Minister Jacinda Ardern's statement on April 12, when she announced that there would be no new offshore oil exploration permits 'was unlawful'.

'Greymouth regrets having to seek the assistance of the Court but it has not been possible to resolve differences with the Minister or her officials,' the company said in a statement.

* Government set to give oil industry breathing space over permits, Greens urge rethink

* Ardern says Government 'actively considering' call to end oil exploration

Auckland businessman Mark Dunphy, pictured with then Energy Minister Simon Bridges in 2014. Dunphy has launched legal action against the Government over its decision to no longer offer offshore exploration permits. The action also claims his company, Greymouth Gas, should have been given a permit in 2017. The permit went to a Chinese-owned company.

* Ardern announces end to oil exploration

* A knock for the regions, but exploration end won't curb NZ oil demand

* No Cabinet paper written, no Cabinet decision made, in 'political decision' to ban new oil exploration**

Greymouth claims that Energy Minister Megan Woods' decision not to award the company an offshore coastal permit in 2017 'was not justified'.

'Greymouth's bid for an offshore coastal permit was better than a successful bid for a comparable permit made by a Chinese new entrant with no material standing in the New Zealand petroleum business.'

In the 2017 block offer - the process under which permits have been offered to the industry since 2012 - Woods granted only one permit, a 547 square kilometres on waters to the south of Taranaki, to Westside New Zealand.

Although the company was described as an Australian oil company active in Queensland, the company is ultimately owned by Chinese company Landbridge Group.

Energy Minister Megan Woods, Prime Minister Jacinda Ardern, Regional Economic Development Minister Shane Jones and Climate Change James Shaw at the announcement on April 12 that there will be no new offshore oil and gas exploration permits offered in New Zealand, with onshore permits offered in Taranaki for another three years.

A spokesman for Woods said as the matter was before the courts, she would not be commenting.

Greymouth chairman Mark Dunphy said in a statement that the company was not 'big oil'.

Dunphy, who the NBR rich list estimates is worth more than $200 million, said New Zealand petrol companies rely on the block offer process 'to ensure transparency, contestability, maintain competitiveness and grow their businesses'.

'It is quite wrong for the Crown to undermine the competitiveness of a New Zealand company whilst favouring a Chinese owned company. The Prime Minister's Statement may represent the preferred policy position but this statement did not comply with the process required by our law and this will be clarified by the High Court,' Dunphy said.

'The policy change is abrupt, counterproductive, comes too soon and will add to current gas shortages and further increase gas and petroleum prices.'

In an interview he said the Government did not follow proper process in the way it handled the announcement.

'There's a process to be followed if you're changing…that law. You can't just make an announcement and say its effective.'

Dunphy said he was seeking to have the permit which the company applied for in 2017 awarded to it.

'We say the decision's wrong. Quite why the decision was reached, we're not sure. Whether it's affected by bias or prejudice, or whether that occurred at a ministerial level or with officials, it's just too early in the day to say,' he said.

'We had the impression in relation to the bid that we made that all was going swimmingly, actually until the new Government was appointed.

'So I don't know what caused the difficulty, but it does rile that a lesser bid by a foreign company should lead to permit award, when ours ended in the opposite result.'

He said he did not intend to speak publicly about the case, but the Crown revealed it was happening in legislation designed to give effect to the Government's decision.

Several clauses in the Crown Minerals (Petroleum) Amendment Bill allude to the action by Greymouth.

'[T]his Bill also provides that an existing proceeding between Greymouth Gas Turangi Limited and the Minister of Energy and Resources may be continued, heard, and determined, or settled, in accordance with the CMA as it is before amendment by this Bill.'