Oil & Gas Regulation 2013

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Bell Gully New Zealand the assets of the company and certain subsidiaries exceed NZ$100 million; or the company holds or controls sensitive land. While investors may not purchase areas on the seabed, it is possible that an onshore area might, in certain cases, constitute sensitive land (by virtue of size and rural location, or proximity to features such as conservation areas, waterways or parks). Applications relating to land assets are assessed by the Minister of Finance and the Minister of Land Information. The potential investor must demonstrate business experience and acumen relevant to the investment, financial commitment to the investment, and their good character. In addition, in the case of sensitive land, the OIO must be satisfied that the overseas person is ordinarily resident in New Zealand or is intending to reside in New Zealand, or, the overseas investment will, or is likely to, benefit New Zealand. 12.2 To what extent is regulatory policy in respect of the oil and natural gas sector influenced or affected by international treaties or other multinational arrangements? The Government’s energy policy is influenced by the Kyoto Protocol and New Zealand’s obligations under that protocol have been implemented through the Climate Change Response Act 2002 and various amendments to that act. Despite this commitment to the Kyoto Protocol, the Government has repealed the Electricity (Renewable Preference) Amendment Act 2008, which, among other things, imposed a 10-year moratorium on new thermal generation of electricity. Nonetheless, the Government has indicated that it intends to retain a target to reach 90% of electricity from renewable sources by 2025, provided this goal does not impact security of energy supply. In 2011, renewable energy made up 39% of New Zealand’s total primary energy supply. On 30 August 2011, the Acting Minister of Energy and Resources released the New Zealand Energy Strategy and the New Zealand Energy Efficiency and Conservation Strategy. The role of the New Zealand Energy Strategy is to set out the strategic direction for New Zealand’s energy sector, including the role that energy will play in the New Zealand economy from 2011-2021. There are four stated priorities on which the New Zealand Energy Strategy is based in order to support New Zealand to optimise its energy potential. They are: diverse resource development; environmental responsibility; efficient use of energy; and secure and affordable energy. Each of the four priorities have specific areas of focus in order to support the relevant priorities. The New Zealand Energy Efficiency and Conservation Strategy acts as a companion to the Government’s primary statement of energy policy which is set out in the New Zealand Energy Strategy and outlines practical actions that encourage energy consumers to make efficient energy decisions. It is effective from 2011-2016. New Zealand has ratified the United Nations Convention on the Law of the Sea. 13 Dispute Resolution 13.1 Provide a brief overview of compulsory dispute resolution procedures (statutory or otherwise) applying to the oil and natural gas sector (if any), including procedures applying in the context of disputes between the applicable Government authority/regulator and: participants in relation to oil and natural gas development; transportation pipeline and associated infrastructure owners or users in relation to the transportation, processing or storage of natural gas; downstream oil infrastructure owners or users; and distribution network owners or users in relation to the distribution/transmission of natural gas. No compulsory dispute resolution procedures are mandated between supply-side participants such as regulators, producers, wholesalers, and retailers. However, the Electricity and Gas Complaints Commission provides a binding dispute resolution service for consumers who have had disputes with their retail provider. Companies signed up to the Complaints Commission include Contact Energy, Vector, Genesis Energy and Meridian Energy (among others). 13.2 Is New Zealand a signatory to, and has it duly ratified into domestic legislation: the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; and/or the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID”)? The Arbitration Act 1996 ratifies the New York Convention in New Zealand. The Arbitration (International Investment Disputes) Act 1979 provides that articles 18 and 20 to 24, and chapters II to VII of the ICSID, have force of law in New Zealand. In addition, the GIC has certain dispute resolution functions under the VTC and the MPOC in respect of the pipelines covered by those codes. 13.3 Is there any special difficulty (whether as a matter of law or practice) in litigating, or seeking to enforce judgments or awards, against Government authorities or State organs (including any immunity)? No difficulty in taking legal action has been experienced. 13.4 Have there been instances in the oil and natural gas sector when foreign corporations have successfully obtained judgments or awards against Government authorities or State organs pursuant to litigation before domestic courts? Yes. Foreign corporations have used the normal litigation process to seek to enforce certain rights in relation to petroleum permits against the Crown. New Zealand 14 Updates 14.1 Please provide, in no more than 300 words, a summary of any new cases, trends and developments in Oil and Gas Regulation Law in New Zealand. New Zealand’s oil and gas sector has undergone significant change ICLG TO: OIL & GAS REGULATION 2013 © Published and reproduced with kind permission by Global Legal Group Ltd, London WWW.ICLG.CO.UK 239
Bell Gully New Zealand New Zealand in recent years and is part way through an exciting transition period, where the legislative and regulatory environment is evolving and developing to adapt to this growing industry. There has been visible and significant support from the New Zealand Government to effect change and progress to significantly increase international investment in New Zealand’s oil and gas sector, and therefore increase oil and gas exploration and development. We expect 2013 to be significant in terms of new regulatory compliance for offshore operators due to the new EEZ Act. In addition, we expect there will be many submissions made by industry on the Crown Minerals (Permitting and Crown Land) Bill as it progresses through the legislative process. Many of the changes proposed in the Bill (in its current form) will benefit industry. There are also a number of provisions industry participants will need to ensure they are familiar with so as to avoid unanticipated operational and tenure consequences. Either way, in order to provide some degree of regulatory certainty, it is to be hoped that they are enacted quickly and that transitional issues will be clearly and carefully managed. David Coull Bell Gully 171 Featherston Street Wellington New Zealand Tel: +64 4915 6863 Fax: +64 4915 6810 Email: david.coull@bellgully.com URL: www.bellgully.com David specialises in corporate and resources law. He advises on M&A and other corporate transactions, the negotiation of commercial contracts and joint ventures, and regulatory matters. David has a particular focus on the oil and gas and minerals sectors. His international experience includes a three-year period at Cravath, Swaine & Moore, the leading New York corporate law firm, where he acted for a variety of U.S and international companies. He also holds an LLM from Cambridge University. David is named as a leading lawyer in Chambers Global 2012, which comments that clients describe him as commercially astute, a solid negotiator and a pleasure to work with. Chambers also notes that David is “equally respected by peers, who concur that his technical ability and industry knowledge rank amongst the best in New Zealand”. He is also named as a leading lawyer in the Asia Pacific Legal 500 2011/2012, the Australasian Legal Business Guide: Energy & Resources Law and Euromoney’s Guide to the World’s Leading Energy and Natural Resources. Angela Bamford Bell Gully 171 Featherston Street Wellington New Zealand Tel: +64 4915 6794 Fax: +64 4915 6810 Email: angela.bamford@bellgully.com URL: www.bellgully.com Angela works in Bell Gully’s corporate department with a particular focus on the energy and resources sectors. She has experience in advising clients regarding general corporate and commercial matters, including drafting and negotiating commercial contracts. Angela regularly advises on upstream and downstream oil and gas activities, including joint ventures, farm-outs, gas transmissions and gas sales agreements, and permit-related obligations (including royalty and work programme obligations). In addition, Angela frequently advises clients on the New Zealand oil and gas and electricity regulatory regimes. She also has experience in dealing with New Zealand Petroleum & Minerals on behalf of clients in relation to permit issues. Chambers Asia Pacific 2012 ranks Angela as an associate to watch. Bell Gully is independently recognised as New Zealand’s leading commercial law firm. We help many of New Zealand’s leading companies and public sector agencies navigate their most complex and ambitious projects, along with their day-to-day operational issues. With a team of around 200 lawyers, we consistently deliver practical solutions to both everyday and unique problems. Internationally, we work with prestigious multinational clients and maintain strong links with leading law firms in Australia, Asia, Europe and the United States. Our 10-partner resources practice has actively advised clients in every aspect of the industry for over two decades, working on many of the most significant transactions and projects within the oil and gas industry and broader energy sector in New Zealand. The team has leading upstream expertise in: permitting activities; M&A transactions; drafting and negotiation of JVOAs and farmout agreements; operatorship issues; operator contracts and arrangements; regulatory matters; transmission and interconnection contracts; land acquisition and land access arrangements; petroleum sales and marketing arrangements; and litigation and dispute resolution. 240 WWW.ICLG.CO.UK ICLG TO: OIL & GAS REGULATION 2013 © Published and reproduced with kind permission by Global Legal Group Ltd, London
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