The new pathway allows companies to apply for a permit when they are ready with competing bidders. Photo: 123rf
Regulation changes allowing new exploration applications have piqued the curiosity of international explorers.
But it remains to be seen whether signs of demand will translate through to a flow of applications under the coalition government's new open market process, according to gas sector representatives.
The new pathway allows companies to apply for a permit when they are ready with competing bidders, getting three months to throw their hat in the ring or forever hold their peace.
The chief executive of sector body Energy Resources Aotearoa, John Carnegie said upcoming events such as the World Energy Council conference in South America will be an opportunity to test the waters.
"International partner groups like the Energy Alliance and offshore energy UK have members who are looking closely at New Zealand's new regulatory settings," he said.
"And in the coming weeks, we'll be sitting down with upstream explorers from North America who have also shown genuine interest."
The new open market process means companies don't have to wait for the government's annual tender round and can work to their own timeframes, said Carnegie.
"If a company applies for a permit, a three-month clock effectively starts ticking, during which others have the opportunity to submit their best plan for the same area.
"And the benefit of that is that the best work programme will win and it means we avoid first-in, first-served situations, and we end up rewarding stronger plans, better capabilities and clearer benefits."
A senior partner at a major law firm, who advises clients in the gas sector but did not want to be named, said the new process is a clever move on the part of the government.
"When you have an open process it galvanises people who might otherwise have been sitting on their hands.
"They've got three months to put their hands up or forever hold their peace."
Carnegie said investors need assurances the policy settings will remain in place, if they are to spend the billions required for exploration.
The coalition government has signalled it will soon reveal where its $200 million kitty set aside in this year's Budget for co-investment in gas fields is being spent.
Carnegie said the co-investment will go some way to restoring investor confidence.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
