KEY POINTS:
The Green Party has challenged the Government to reveal the deal struck - to justify its claims of a potential income stream of billions of dollars - from multi-national oil consortiums exploring for oil and gas in the Great South Basin.
The Greens have rounded on the Government, raising multiple concerns about the two five-year permits awarded to US-based Exxon Mobil and Austria-based OMV New Zealand.
Co-leader Jeanette Fitzsimons' concerns include any potential environmental impacts, the Government's lowering of royalty rates as an incentive, the potential take for the Government through taxes and the fact no "clean up" bond is required of the consortiums in case of an oil spill.
"I'd like to see them table the whole package in Parliament, all the details of the the deal; be fully transparent," she said. "If its signed up it shouldn't be confidential any more."
Associate Energy Minister Harry Duynhoven was unavailable for comment yesterday.
New Zealand First has described the Green Party's criticism as hypocritical and "out of touch".
NZ First deputy leader Peter Brown said an oil discovery would "massively boost exports and improve our balance of payments [deficit]".
Fitzsimons agreed with that, but she wanted to know the details and financial expectations the Government had projected.
Brown said rather than place the costs of exploration on the taxpayer, with the two consortiums having said they could spend $1.2 billion on exploration alone, the present arrangement allowed New Zealand to benefit from any discoveries "with minimal expense and risk".
The Greens and the New Zealand branch of the World Wide Fund for Nature have raised concerns since the permits were awarded for exploring for oil and gas in the Southern Ocean, which is home to a variety of wildlife, and the hazards posed if there is an oil spill.
Fitzsimons believed that, just as major onshore gold miners must post a bond in case of an environmental mishap, offshore explorers should similarly be required to post a bond.
She described ExxonMobil coming under the provision of the Maritime Safety Act as posing a "ludicrous prospect" where "bureaucrats" from Maritime New Zealand could call on ExxonMobil to pay for any oil spill clean-up.
Fitzsimons said Duynhoven would be offering the ExxonMobil and OMV New Zealand consortium's one of the cheapest oil and gas royalty regimes in the world.
Duynhoven has said in the past that the Government's combined take in royalties and company would be 40 per cent to 50 per cent of a consortium's profit, but Fitzsimons believes multinational profits' could be assessed overseas, where high tax rates would erode the profit margin.
"Not only has the Government not done any Strategic Environment Assessment of the environmental risks involved, as would happen in Europe. It is not even requiring a liability bond to be posted, to cover the clean-up costs of any spillage in this sensitive region," Fitzsimons said.
Fitzsimons said of about $15 million given to Crown Minerals by the Government to carry out seismic studies, which is freely given to oil companies to study, she understood about $10 million had been spent in the Great South Basin.
Because of this expenditure, the Government should be transparent about the details of any production contract, she said.
- OTAGO DAILY TIMES
