IN CONFIDENCE Energy and Resources Weekly Report To Hon Dr Megan Woods Minister of Energy and Resources Week beginning Monday 20 November 2017 . -- 9. MINISTRY OF BUSINESS, 3 INNOVATION Vg; HIKINA WHAKATUTUKI Energy and Resources Weekly Officials? Meeting Agenda 4:15 pm 5:15pm Monday 20 November 2017 Action Re uired Item Subject Person Orglaltern I (933b,. I 99 Inform I Noting I Discussion) 1- Retail power price review Andrew Hume Oral Item Discussion Heating and insulation Andrew Hume Oral Item Discussion 2. grant scheme Brie?ng 0948 17-18 3 Re?nery to Auckland Andrew Hume Oral Item Discussion pipeline review 4. Block Offer 2018 Josh Adams Oral Item Discussion 5. Weekly Report Minister Oral Item Discussion 6. Any other business Ministry of Business, Innovation Employment of?cials attending: James Stevenson-Wallace, General Manager, Energy and Resource Markets Tim Townsend, Acting Manager, Sector Development Policy llana MiHer, National Manager, Minerals Andrew Hune, Manager, Energy Markets Policy Josh Adams, National Manager, Petroleum Marcos Pelenur, Manager, Resource Markets Policy Justine Cannon, Senior Policy Advisor, Energy Markets Policy -. 9i MINISTRY OF BUSINESS, INNOVATIONEEMPLOYMENT . HIKINA WHAKATUTUKI Action points from last Of?cials? Meeting back to the drafting team. Item Actions Name Ministerials MBIE advised once a few ministerials have Emma - Ensur'ng .We are been completed, MBIE will get some getting tone "9m templates agreed with Hayden and sent Stakeholder lines - Ensuring consistency with messaging MBIE to circulate a list of Energy Resources hot topics to agree lines to be used with stakeholders, with the Minister's Office. All Retail power pricing - Developing terms of reference. MBIE advised this will be a broad review covering the whole sector to consider how to ensure a power supply that is secure, sustainable and affordable. - Andrew Hume Fuel markets - Referring the matter to the ComCom MBIE to provide preliminary advice to Minister Woods and Minister Faafoi on referring this issue to the Minister of Commerce and Consumer Affairs by 23 November. Andrew Hume RAP update - Length of time for inquiries MBIE to con?rm a ballpark eta for the Re?nery?s own report by end of week. Andrew Hume Amendment Bills 45mins, by end of week. Land access MBIE to provide an oral brie?ng on the Ilana Miller/ Marcos -lmpacts impacts, including legal exposure at the Pelenur! Tim Townsend next Officials meeting. /Dave Darby Regulatory Of?cials to discuss with Ben Cunliffe for Marcos Pelenur Healthy Homes - Options for grants The Minister noted the issue. To be discussed jointly with Minister Twyford soon. Andrew Hume Fonterra - Transition MBIE to send the Road Map to the Minister?s Of?ce and provide back pocket Andrew Hume Scion Bioenergy - Engagement MBIE to provide a brie?ng on options to engage with Scion in relation to the lEA?s Bioenergy Group. (Suggest discussing with Science and Innovation portfolio), by 4pm Friday, 9 December. Andrew Hume Singapore meeting Minster to con?rm if she is able to attend. Dave Darby MBIE-MAKO-17157744 MINISTRY OF BUSINESS, 3% INNOVATION EMPLOYMENT HIKINA WHAKATUTUKI 1. Managing the Estate Loyz NZ Ventures to Exit New Zealand Comment: Next Steps: Loyz NZ Ventures (Loyz) has applied to surrender Petroleum For information. Exploration Permit (PEP) 38479. Loyz is a privately funded Singapore company. PEP 38479 is located onshore and offshore north of Awakino in Northern Taranaki. A small gas discovery was made in the permit in 2008. Of?cials understand that capital constraints in the current market and lack of viable commercialisation options were the main reasons for the surrender. This permit surrender is unlikely to attract attention in the mainstream media. It may receive some coverage in the online news site Energynews. Responsible Manager: Josh Adams Petroleum Club and Industry Regulators Forum in New Plymouth Comment: Next Steps: Petroleum Club is a quarterly event hosted by Freeman Media in For information. New Plymouth. The next meeting will be Wednesday 22 November. The purpose is to bring together permit holders, explorers, industry At some stage Freeman service providers, regulators, and market commentators together to Media may ask you to discuss upcoming activity and information sharing. Agenda items speak at the Petroleum include presentations from industry, operator activity updates from Club attending companies, industry representatives such as Petroleum Exploration Production Association New Zealand (PEPANZ) and regulators. MBIE provides a regular 5 minute update. The focus of this meeting will be an update on the Energy and Resource Markets Branch compliance strategy. Coinciding with Petroleum Club, an Industry Regulators forum is typically held in New Plymouth the following day. This is co-hosted by PEPANZ and the Environmental Protection Agency (EPA). The forum is an opportunity for regulators to discuss key sector issues with operators. Examples of agenda items include offshore decommissioning and offshore ?nancial assurance. There is also a discussion about general industry operational and compliance issues and options for industry and/or regulators to work together to address those. Responsible Manager: Josh Adams MBIE-MAKO-17157744 4 .. MINISTRY or BUSINESS, INNOVATION I WW. HIKINA WHAKATUTUKI 2. Priority Developments Heading Comment: Next Steps: Responsible Manager: Heading Comment: Next Steps: Responsible Manager: MBI E-MAKO-17157744 9? MINISTRY OF BUSINESS, INNOVATION EMPLOYMENT HIKINA WHAKATUTUKI 3. Policy Developments Onshore Petroleum Financial Assurance Comment: In 2014 the Parliamentary Commissioner for the Environment released a report on drilling for oil and gas on land in New Zealand. This report included a recommendation that focused on ?nancial liability associated with onshore petroleum wells, including residual liability. Responsible Manager: Dr Marcos Pelenur Next Steps: We will brief you shortly on these matters. Report back on the ?ndings and recommendations of the Fuel Market Financial Performance Study Comment: Of?cials are working to meet your deadline of 23 November for the report back on our assessment of the ?ndings and recommendations of the Fuel Market Financial Study. Feasible next steps include: 1) do nothing and maintain a watching brief; 2) continue down a regulatory path of further analysis of whether prices are reasonable with possible regulatory interventions down the track; and 3) some form of direct Government intervention. Each of these options presents risks and bene?ts. We would like to discuss these with you at the earliest opportunity. Responsible Manager: Dr Marcos Pelenur Next Steps: We will be providing the report to you on 23 November as requested. Officials would like to discuss with you the range of options for how to proceed from here. Regulatory Systems Amendment Bill (2) Comment: Of?cials proposed amendments to the Crown Minerals Act 1991 (CMA) and the Continental Shelf Act 1964 (CSA) under the Regulatory Systems Amendment Bill (2) (R88 The majority of the proposals were approved by the former Cabinet in December 2016 and April 2017. Regulatory Systems Team will be brie?ng the Minister for Economic Development on R88 (2). It will include a list of the amendments previously agreed to by Cabinet. You will receive a copy of this brie?ng. Responsible Manager: Marcos Pelenur Next Steps: You will receive a copy of the brie?ng that will be sent to the Minister for Economic Development. MINISTRY OF BUSINESS, INNOVATION EMPLOYMENT HIKINA WHAKATUTUKI 3. Policy Developments Regulating the decommissioning of offshore oil and gas facilities Comment: Next Steps: The EEZ Act was amended earlier this year to introduce new provisions relating to decommissioning, more importantly the introduction of a requirement for operators to have an accepted decommissioning plan by the Environmental Protection Authority (EPA) before the operator applies for any marine consents needed to undertake decommissioning related activities. Responsible Managers: Tim Townsend and Josh Adams MBIE-MAKO-17157744 7 . 2% INNOVATION EMPLOYMENT 9i MINISTRY OF BUSINESS, HIKINA WHAKATUTUKI 4. Regulatory Reform Implementation and Operational Matters Wellington Electricity resilience Comment: Wellington Electricity will soon submit an application to the Commerce Commission for a customised price-quality path (CPP). Wellington Electricity is seeking approval to raise its prices by a small amount to recover expenditure that will improve disaster resilience in the region. Wellington Electricity?s application will require the Commission to adopt a non-standard regulatory process. The previous Minister of Commerce and Consumer Affairs issued a policy statement to the Commission supporting it in this course of action. The Commission has just released (or will soon release) a oonsultation paper about its proposed ?streamlined" approach to Wellington Electricity's CPP application. The Commission will consult again on the substance of the application in December or January 2018. Responsible Manager: Andrew Hume Next Steps: A ?nal decision on Wellington Electricity?s CPP is expected before 1 April 2018 MBI E-MAKO-17157744 .. MINISTRY or BUSINESS, INNOVATION HIKINA WHAKATUTUKI 5. Stakeholder Issues Heading Comment: Responsible Manager: Next Steps: Heading Comment: Responsible Manager: Next Steps: MBI E-MAKO-17157744 * MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI NZ Petroleum & Minerals permits approved THURSDAY, 9 NOVEMBER 2017 TO WEDNESDAY, 15 NOVEMBER 2017 Permit activity Permit Number Permit Type Client Location Comment Extension of land 41777 Minerals Mining Taupo Scoria Limited Waikato Land area increased by a further 35.730 hectares Partial surrender 51486 Minerals Mining P and R Mining Limited West Coast Partial surrender - area decreased by 2.778 hectares Change of operator 52365 and permit transfer Minerals Mining G and SR Thompson Family Trust (100%) West Coast Transferred to Agri Partners Limited (100%) Full surrender 55160 Minerals Exploration Madden Mining Limited West Coast Permit surrendered in full of Change commencement date 60180 Minerals Exploration Strategic Materials Pty Tasman Ltd Change of commencement date to 16 January 2018 Change of operator and permit transfer 60191 Minerals Mining Cory James Sutherland West Coast (100%) Transferred to Mark Arthur van der Wilt (100%) New permit 60260 Minerals Mining BLACKGOLD MINING West Coast LIMITED Declined due to information on resource estimates not being provided within requested timeframes New permit 60390 Minerals Prospecting Aspiring Limited Granted for a period of 2 years to prospect for all metallic minerals (excluding uranium),garnet and zircon over an area of 24.762 square kilometres MBIE-MAK0-17157744 Resources West Coast 10 * . . MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI New permit Permit Permit Type Number 60395 Minerals Prospecting Relinquishment 52717 Permit activity MBIE-MAK0-17157744 Petroleum Exploration Permit Client Aspiring Limited Location Resources West Coast NZOG Devon Limited Offshore Canterbury Basin 11 Comment Granted for a period of 2 years to prospect for all metallic minerals (excluding uranium),garnet, monazite and zircon over an area of 40.722 square kilometres Surrendered 25% of permit area in accordance with work programme conditions * MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Access Arrangements under consideration by ERM and other Crown agencies requiring Joint Ministerial Approval Agencies Permit number Applicant Land Status and Location LINZ & ERM 41808 Oceana Gold (New Zealand) Limited Crown Land - Waihi LINZ & ERM 51630 Oceana Gold (New Zealand) Limited The Crown land covers commercial forest operated by Crown Licensee, Forest Matariki Forests and administered by LINZ in the Waikato region. LINZ & ERM 40813 Oceana Gold (New Zealand) Limited The Crown land covers commercial forest operated by Crown Licensee, Forest Matariki Forests and administered by LINZ in the Waikato region. DOC & ERM 41808 Oceana Gold (New Zealand) Limited Crown Land - Waihi DOC & ERM 41289 Rangitira Developments DOC stewardship land Limited at the southern end of the Buller Plateau. DOC & ERM 37168 Roa Mining Company Crown land Limited district. MBIE-MAK0-17157744 Comment The applicant currently has a licence to occupy the Crown land. - Grey Joint wildlife application. 12 MINISTRVOFBUSINESS, • INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Upcoming Meetings, Events and Announcements Upcoming meetings: Meeting with/ Purpose Monday 20 November Tuesday 21 November Breakfast with Tony Seba Wednesday 22 November Thursday 23 November Friday 24 November MBIE-MAK0-17157744 I I I I I I Time 7:45- 8:15 am 13 MINISTRVOFBUSINESS, • INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Upcoming speeches & communications: Event or announcement Activity Date Speech / media release due MBIE Contact Speech at the BusinessNZ Energy Council Meeting Speech Tuesday 21 November 9:15- 9:45am N/A Vanessa Head Upcoming Cabinet Papers and Briefings Upcoming Cabinet Papers Comment Title of paper Provided by To be considered by Cabinet Committee Contact N/A Upcoming Briefings, Aide Memoires and Reports Subject Comment Due date Contact Regulatory Systems To provide background material on 24 November - regulatory system assessments (RSA) Assessment and the next steps for the petroleum Overview and minerals RSA. Hannah Sherwood Onshore Petroleum To provide an overview of the onshore 24 November Financial Assurance petroleum financial assurance work stream and an update on next steps. Nicholas Fitzpatrick Initial Advice on a Heating and Insulation Grant Scheme to Support the Healthy Homes Guarantee Bill Amir Mehta MBIE-MAK0-17157744 To advise you on the initial decisions 22 November required for a new heating and insulation grant scheme to support the Healthy Homes Guarantee Bill. 14 9f MINISTRY or BUSINESS, 1 INNOVATION EMPLOYMENT HIKINA WHAKATUTUKI OIA Requests Ministerial OIAs Date due to Number Name Date Minister?s Date due to Relates To I Status Update received requestor Of?BIM and associated correspondence, notes and aide memoires Departmental OIAs Date due to Date Minister?s Date due to Number Name received Office (if req uestor Relates To [Status Update applicable) 171843592 Copy of sent application clari?cation request. Status: Drafting. 1718-0524 03 Oct 17 29 Nov 17 Copy of the old Crown Minerals Act section 41 practice statement. Status: Drafting. 1718'0443 03 0d 17 29 NOV 17 Information regarding a previous OIA and mining tender. Status: Gathering information. Parts 1 to 6 responded. Part7 extended. BIE-MAKO-17157744 15 MINISTRV OF BUSINESS, .1 ~99 INNOVATION EMPLOYMENT HI KINA WHAKATUTUKI Date due to Number Name Date M'n'Ster.s Date due to Relates To I Status Update received Office (If requestor applicable) 1713'0349 All documents, reports and analysis, including emails, relating to Thompson Clark's contract work for MBIE in the Advantage N2 2013 Petroleum Conference. Status: Gathering information. 1718-0400 copy of the Vl?n' pipeline report referred to on Morning Report. Status: Drafting. 1718?0401 copy of the Wiri pipeline report referred to on Morning Report. Status: Drafting. 1718-0676 - 12 Nov 17 8 Dec 17 Copies of documents relating to previous OIA Status: Gathering information. 1718'0525 Copy of 2013 Epithermal Block Offer consultation document. Status: Drafting. In consultation with iwi. 1718?0678 Block Offer iwi consultations Status: Gathering information. 1718-0675 14 Nov 17 12 Dec 17 Historic fees paid for exploration permits Status: Scoping. 1718?0686 copy of the Win' pipeline report referred to on Morning Report. Status: Drafting. MBIE-MAKO-17157744 16 g. MINISTRY OF BUSINESS, INNOVATION EMPLOYMENT v-v W~u_ HIKINA WHAKATUTUKI Date due to Number Name Minister-s Date due to Relates To [Status Update received Of?ce (If requestor applicable) 1718-0669 Fuel Market Financial Performance Study documents. Status: Scoping. 17