"If any company had a bright idea and thought there might be some prospectivity associated with an area outside of that [block offer] they could lodge an application," he said.
"Some of the discoveries like the Tui field were made under the PIT system. It allowed for smaller companies that were fleet of foot and fairly innovative to lodge an application."
Pfahlert said the industry would generally support the strategy, which reiterates the Government's backing of the oil and gas sector and outlines the industry's potential to make a far greater contribution to national income.
Acting Minister of Energy and Resources Hekia Parata said the proposed approach "would allow us to focus on areas of greatest potential, and will be more transparent for the public, who would know which areas are available for permitting and which are not".
Royalties from oil and gas are worth nearly $3.2 billion a year and in the next decade this could grow to nearly $15 billion under the most optimistic discovery and petroleum price scenario released with the strategy.
Pfahlert said he was worried about the viability of some small companies.
Others in the sector have welcomed the proposals.
A spokesman for New Zealand Oil & Gas said the tighter regime would bring us into line with other countries.
"We have advocated for some time that there should be annual block offers. That provides more certainty. Obviously the Government would have to make sure there were enough opportunities to maintain a level of activity in the industry."
A Greymouth Petroleum spokeswoman said the block offer system had allowed the company to pick up acreage in the Great South Basin and around Taranaki.
"We were pleased with the announcement," she said.
The strategy says New Zealand could be a net exporter of oil by 2030.
New Zealand's hydrocarbon fields are mostly classified as frontier territory and gas prone.
Excitement at gas discovery
Greymouth Petroleum says it has made an exciting gas condensate discovery onshore in Taranaki.
The New Zealand owned and operated company said it had flowed gas and condensate from the first stage of its Onaero field well operations in North Taranaki
About one terajoule of gas a day was flowing.
Greymouth will now apply to the Government to sell gas from the field.
"It's another exciting piece of news for us. It's onshore, close to infrastructure. They're early days but this is encouraging," a spokeswoman said.
Other producing fields in Taranaki held by Greymouth group companies include Turangi, Ohanga, Kowhai, Kaimiro and Ngatoro.
