More boasting from the Nats today on how quickly they are selling the country's nationalised resources off to foreigners.
Government's oil and gas tender
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Energy and Resources Minister Simon Bridges today announced details of the Government’s second round to attract competing bids for oil and gas exploration permits.
Speaking at the Advantage NZ: 2013 Petroleum Conference, Mr Bridges said Block Offer 2013 is an important step towards realising the potential of New Zealand’s oil and gas resources.
[...]
“Block Offer 2013 includes 189,000 square kilometres of offshore and over 1,500 square kilometres of onshore area. The following areas will be open for bidding on 24 May:
Just as well Ministers tend to focus on the jobs and the on-shore economy than the royalties because that is definitely the weak point. The fact they assiduously avoid any direct statement as to what exactly the amount of the royalty is in these matters speaks volumes. Any statement from a Minister will never answer this question - it will be rolled into the accounting profit and company tax etc. the public will never be given a straight answer. Why? We are being ripped off. It is very difficult to come to any other conclusion.
I've looked for the answers to royalties in this official review, but as one would expect it is well disguised. [Found here - see figures at end of blog] On top of this fog is that each field - developed in stages over the years - seems to be on a different royalty system. This makes generalising conveniently difficult. The review is about the valuation as a whole over the lifetime of the fields rather than the revenue. What it shows is not that fabulous and they are not anticipating a bonanza.
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Over about 20 years of life the current fields will therefore yield on that total $3.2b about $160m pa. Hardly Australia or Kuwait. The projections are all over the show as it is guesswork about what finds will or will not take place in the next generation. The report says:--
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That would still be well below half a billion dollars annually. The report's low trajectory shows a peak of a billion dollars in annual royalties at 2036, the mid one, $1b pa by 2018, $2b by 2030 and $5b by 2046. The high trajectory is la-la land. What I would like to know is what the average royalties are on a barrel of oil, cumex of gas etc., compared with other nations.
From the figures at the NZPAM:--
-- The revenue has declined significantly - perhaps the global recession more than output.
Government's oil and gas tender
--
Energy and Resources Minister Simon Bridges today announced details of the Government’s second round to attract competing bids for oil and gas exploration permits.
Speaking at the Advantage NZ: 2013 Petroleum Conference, Mr Bridges said Block Offer 2013 is an important step towards realising the potential of New Zealand’s oil and gas resources.
[...]
“Block Offer 2013 includes 189,000 square kilometres of offshore and over 1,500 square kilometres of onshore area. The following areas will be open for bidding on 24 May:
- three defined onshore blocks in Taranaki
- two defined onshore blocks on the East Coast of the North Island
- three offshore release areas in the Reinga-Northland Basins, Taranaki Basin and Great South-Canterbury Basins
Just as well Ministers tend to focus on the jobs and the on-shore economy than the royalties because that is definitely the weak point. The fact they assiduously avoid any direct statement as to what exactly the amount of the royalty is in these matters speaks volumes. Any statement from a Minister will never answer this question - it will be rolled into the accounting profit and company tax etc. the public will never be given a straight answer. Why? We are being ripped off. It is very difficult to come to any other conclusion.
I've looked for the answers to royalties in this official review, but as one would expect it is well disguised. [Found here - see figures at end of blog] On top of this fog is that each field - developed in stages over the years - seems to be on a different royalty system. This makes generalising conveniently difficult. The review is about the valuation as a whole over the lifetime of the fields rather than the revenue. What it shows is not that fabulous and they are not anticipating a bonanza.
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We calculate the overall value of the Crown’s royalty from currently producing fields in the petroleum estate, as at 30 June 2010, to be NZ$3,191 million.
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Over about 20 years of life the current fields will therefore yield on that total $3.2b about $160m pa. Hardly Australia or Kuwait. The projections are all over the show as it is guesswork about what finds will or will not take place in the next generation. The report says:--
We view the prudent valuation for the Crown’s royalty from future discoveries, as at 30 June 2010, to be $5,545 million [...]
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That would still be well below half a billion dollars annually. The report's low trajectory shows a peak of a billion dollars in annual royalties at 2036, the mid one, $1b pa by 2018, $2b by 2030 and $5b by 2046. The high trajectory is la-la land. What I would like to know is what the average royalties are on a barrel of oil, cumex of gas etc., compared with other nations.
From the figures at the NZPAM:--
| Government revenue (NZ$) from petroleum and mineral royalties and ERLs | |||||
| 2011-2012 | 2010-2011 | 2009-2010 | 2008-2009 | 2007-2008 | |
| Energy Resource Levy – coal | 9,510,421 | 8,257,339 | 6,494,095 | 7,144,633 | 8,198,386 |
| Energy Resources Levy – gas | 26,852,346 | 27,451,449 | 32,697,508 | 31,378,469 | 38,056,798 |
| Total ERLs | 36,362,767 | 35,708,787 | 39,191,603 | 38,523,102 | 46,255,183 |
| Royalties – minerals (excluding coal) | 10,789,115 | 9,284,529 | 11,345,526 | 6,543,107 | 3,614,108 |
| Royalties – coal | 2,756,508 | 2,258,972 | 918,339 | 1,034,875 | 1,304,758 |
| Total royalties – minerals | 13,545,623 | 11,543,501 | 12,263,865 | 7,577,982 | 4,918,866 |
| Total royalties – petroleum | 333,760,254 | 357,058,364 | 399,194,757 | 511,580,791 | 86,093,975 |
| Total royalties | 347,305,877 | 368,601,865 | 411,458,621 | 519,158,773 | 91,012,840 |
| Total ERL and royalties – minerals, including coal | 23,056,044 | 19,800,840 | 18,757,960 | 14,722,615 | 13,117,252 |
| Total ERL and royalties – petroleum | 360,612,600 | 384,509,812 | 431,892,265 | 542,959,260 | 124,150,773 |
| Total revenue (NZ$) | 383,668,644 | 404,310,652 | 450,650,223 | 557,681,875 | 137,268,023 |
