An appropriate return to the Crown from the petroleum estate

摘要

Under the Crown Minerals Act 1991 and the Continental Shelf Act 1964, the Crown, represented by the Minister of Energy, owns or has jurisdiction over all petroleum in land within New Zealand, the Exclusive Economic Zone (200 nautical miles from the coastline) and New Zealand's continental shelf where this extends beyond 200 miles. Crown ownership of New Zealand's petroleum resources dates back to 1937, when the Government enacted the Petroleum Act 1937 and declared petroleum in its natural condition to be the property of the Crown. The objectives in passing the Petroleum Act 1937 included the need to recognise that New Zealand had petroleum resources and that these were a potentially valuable national asset rather than property associated with individual ownership. The Petroleum Act's purpose was to make better provision for the encouragement and regulation of mining for petroleum and to provide for matters incidental hereto. The Crown Minerals Act 1991 superceded the Petroleum Act 1937. It confirmed Crown ownership of petroleum and the Act defines the mechanisms for managing the Crown mineral estate asset, including the Crown's petroleum resources. The Crown Minerals Act and associated minerals programmes (the Minerals Programme for Petroleum January 1995, being that programme relevant to this paper) put strong emphasis on efficient allocation and obtaining a fair financial return in respect of Crown minerals and petroleum, reiterating the concept that the Crown mineral estate is an asset that has to be effectively managed. The value of the mineral and petroleum estate to the Crown has been assessed at around $1.3 billion. Most of this value (over 90%) is in petroleum. The value has been determined on the basis of energy resources levies and royalties payable on current mining licences, fees payable on licences and permits, and an estimate of expected royalties and fees from future discoveries. The return to the Crown from the petroleum estate is obtained directly in the form of royalties, energy resources levies and fees. In 1998-99, about $ 120 million was obtained. The return to the Crown is also obtained in the form of exploration work undertaken and copies of all data and associated reports. The value of the petroleum estate is determined by such value drivers as perceived relative prospectivity, costs of development and extraction, oil and gas prices, sovereign risk, royalty regime and work programme requirements and tax. Crown Minerals can influence the royalty regime and work programme requirements and through promotion can try and influence perceived relative prospectivity.