OPENING REPRESENTATIONS FOR

ORIGIN ENERGY RESOURCES KUPE NZ LTD ON BEHALF OF THE KUPE JOINT VENTURE PARTIES

16 FEBRUARY 2017

B S Carruthers / D Owen Phone +64 9 367 8000 Fax +64 9 367 8163 PO Box 8 DX CX10085 Auckland

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BEFORE THE ENVIRONMENTAL PROTECTION AUTHORITY

IN THE MATTER of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012

AND

IN THE MATTER of applications for marine consent and marine discharge consents by Trans-Tasman Resources Limited to undertake iron ore extraction and processing operations offshore in the South Taranaki Bight

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MAY IT PLEASE THE DECISION MAKING COMMITTEE :

1. SUMMARY OF POSITION

1.1 The Kupe Joint Venture ("Kupe JV ") is an unincorporated joint venture between four partners:

(a) Origin Energy;

(b) Genesis Power Ltd;

(c) New Zealand Oil & Gas Ltd; and

(d) Mitsui E&P New Zealand Ltd.

1.2 Origin Energy Resources Kupe NZ Limited ("Origin ") is the operator

of the Kupe JV and makes this representation on behalf of the Joint

Venture Parties. They are referred collectively in this representation

as the "Kupe JVPs ".

1.3 Origin and the Kupe JVPs have existing interests in the proposed

consenting area under s 4 of the Exclusive Economic Zone and

Continental Shelf (Environmental Effects) Act 2012 ("EEZ Act "), being

Petroleum Mining Licence 38146 ("PML 38146") and the rights and

interests it gives them as a lawfully established existing activity,

together with the existing infrastructure established and operated

under PML 38146.

1.4 The Decision Making Committee ("DMC") must "take into account"

any effects on existing interests.1 It can only disregard those effects if

written approval has been obtained from the person holding those

existing interests.2 Trans-Tasman Resources ("TTR") has not

obtained the written approval of Origin or the Kupe JVPs. Had TTR

been able to satisfy their concerns with its application, written approval

might have been obtained. But that is not the case and the DMC must

discharge its statutory duty to take into account any effects on their

existing interests. In ascertaining what effects there are, the DMC

must also apply the relevant information principles in s 61 of the EEZ

Act. 1 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012

("EEZ Act) , s 59(2)(a). 2 EEZ Act, s 59(5)(c).

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1.5 Around half of TTR's 66 km2 marine consent application overlaps PML

38146.3 The marine consent area extends close (1.14 km) to the

existing Kupe Wellhead Platform, the capital cost of which (and its

associated infrastructure) was in excess of $1.3 billion.4 The marine

consent area also overlays an existing (capped) Kupe Wellhead and a

number of identified hydrocarbon prospects and leads.5 The Kupe

JVPs may need to develop further infrastructure in the future within

the TTR marine consent area, in order to exploit the resources they

have rights to.

1.6 Despite stakeholder engagement and negotiations regarding potential

co-operation between TTR and Origin, Origin continues to hold

concerns regarding the known and potential adverse effects of the

proposed activity on its operations and existing interests in the South

Taranaki Bight ("STB"). Origin's concerns have remained

substantively the same throughout its engagement with TTR and

Origin has notified TTR of these on many occasions.6 Origin would

have preferred to reach an agreement with TTR on these matters

before a new application was lodged.

1.7 TTR elected to submit the current application to the EPA without

making any further substantial progress with Origin. Origin is

concerned that there was almost no information, assessment, or

evaluation of the effects of TTR's proposal on the Kupe JVPs'

interests in the application,7 and fundamentally disagrees with TTR's

view that the conditions attached to TTR's Minerals Mining Permit8

("MMP") sufficiently protect Origin's operations.

3 Refer to Appendix 1 of these submissions. 4 Evidence of Owen Hobbs at [4.14]. 5 Kupe Wellhead no. 4. Refer to Appendix A of these submissions and Evidence of Iain Currill at [5.21] - [5.23]. 6 For example, Origin's concerns, informed by a review of the proposed activity by Origin's own internal experts and by AMOG Engineering Solutions, were set out in a letter to TTR in May 2016. These concerns were also reflected in Origin's July 2016 response to a draft agreement and narrow amendments to the application proposed by TTR. 7 Refer page 177 of the Impact Assessment. 8 Minerals Mining Permit 55581, 2 May 2014.

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1.8 While these conditions provide a platform for consultation, they

contain significant gaps, fail to address key known and potential

effects, and are not sufficiently detailed or robust enough to ensure

that risks to Origin's infrastructure posed by TTR's proposed operation

are avoided, remedied or mitigated to an acceptable level. Origin has

not yet been able to gain sufficient certainty or comfort from its

engagement with TTR to ameliorate those concerns. Finally, the

MMP conditions were granted under a significantly different legislative

framework; that of the Crown Minerals Act 1991 ("CMA"), and the

tests required to be met under the CMA and EEZ Act are deliberately

distinct.

1.9 TTR's position, in Origin's view, has commenced from the wrong

starting point. There is no reverse onus on Origin to prove that

conditions above and beyond that provided by the MMP are

necessary. Rather, under the EEZ Act, where express provision is

made for the consideration of adverse effects on existing interests,

and where the information principles under s 61 place a clear onus on

the applicant to satisfy the DMC,9 it is for TTR to address and satisfy

the DMC that the adverse effects of the proposal on Origin's existing

interests will be appropriately avoided, remedied, or mitigated. By

adopting the wrong starting point, TTR is running the risk of another

decline.

1.10 Origin contends that TTR has provided inadequate information or

assessment as to its potential impacts on Origin's interests, and has

not adequately consulted with it. In the absence of that information,

and due to both the likelihood and significant consequences which

may result from damage to Origin's existing interests, the DMC should

decline the consent sought. Alternatively, if the DMC is minded to

grant consent, it must at a minimum impose the conditions requested

by Origin and outlined in the AMOG Report10 to adequately avoid,

remedy or mitigate effects on their existing interests.

9 Or, in the absence of satisfaction, to favour caution and environmental protection. 10 Appended to the Evidence of Christopher Carra as Appendix B.

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2. BACKGROUND FACTS

Kupe JVPs' interests

2.1 PML 38146 covers an area of 257 km2 in the STB. It gives the Kupe

JVPs exclusive rights to mine for petroleum within that area. The field

has taken over 30 years to develop,11 with the first discovery of gas in

1986. The final investment decisions were made in 2006, with the first

gas produced in 2009 (following capital investment of over $1.3

billion).12 The current facilities have a design life of 25 years.13 The

current Kupe Wellhead Platform and infrastructure are likely to exist

for almost all of TTR's 20-year consent period, if not longer (as the

facilities can be maintained or upgraded to extend beyond their design

life). PML 38146 expires in June 2031,14 but can be renewed.

2.2 A statutory exclusion zone operates to keep all other vessels and

activities 500 m away from the Kupe Wellhead Platform.15 That is a

minimum safety requirement and does not indicate that any activity

further away will have no effect on the Kupe infrastructure or interests.

TTR's iron sand proposal

2.3 TTR's proposed marine consent is for a 66 km2 area. Approximately

half of that area overlaps PML 38146, including the currently capped

Wellhead no. 4.16 As indicated above, the marine consent area

extends to within 1.14 km of the Kupe Wellhead Platform. The

proposed anchoring buffer zone17 extends beyond the project area

and the nominal 2km anchor spread (1km line) of the Integrated

Mining Vessel ("IMV") means anchors will be set, and hauling tugs will

operate, immediately adjacent to the exclusion zone.18

2.4 In May 2014, TTR obtained a minerals mining permit under the Crown

Minerals Act 1991.19 Origin engaged with New Zealand Petroleum and

Minerals ("NZPAM") in respect of that permit. While some of the

permit's conditions relate to Origin, and as discussed further below, 11 Refer Evidence of Owen Hobbs, figure on page 5. 12 Evidence of Owen Hobbs at [4.14]. 13 Evidence of Owen Hobbs at [4.4]. 14 Evidence of Owen Hobbs at [4.10]. 15 Continental Shelf (Kupe Wellhead Platform Safety Zone) Regulations 2006. 16 Refer to Appendix A of these submissions. 17 Proposed Conditions of Consent. Condition 62. 18 Appendix A of the Evidence of Robert Overy, at [9]. 19 Minerals Mining Permit 55581. 2 May 2014.

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those conditions are insufficient to protect its existing interest. In light

of the significant information gaps present, and the lack of certainty

provided by the currently proposed consent conditions, Origin is

seeking that the application be declined. If, in the alternative, the

DMC is minded to grant consent, Origin submits that it must impose

additional conditions on that consent to ensure that those information

gaps are filled, and the known and potential effects on Origin's

operations are adequately accounted for (through avoidance where

possible, or mitigation).

3. KEY CONCERNS

3.1 With regard to the Kupe JV infrastructure and interests, the Kupe

JVPs are particularly concerned about:

(a) collision by TTR's vessels or crawler with the platform,

umbilical or other infrastructure, which is a potential effect of

low probability, but with a high (and potentially catastrophic)

impact;20

(b) loss of integrity of the existing infrastructure due to changes

in the oceanographic environment resulting from the mining

activities;

(c) loss of visibility at the platform, umbilical and other existing

infrastructure making it difficult to monitor or repair the

infrastructure; and

(d) inability to develop and utilise the petroleum resource in the

remainder of its permit area due to conflict with TTR

activities.

20 EEZ Act, s 6(1)(f).

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4. LEGAL FRAMEWORK

4.1 This representation focuses on the legal questions most relevant to

the Kupe JVPs' interests.

Existing interests

4.2 Section 59 requires the DMC to:

(a) "take into account";

(b) "any effects on ... existing interests of allowing the activity",

where existing effects are defined as:

... the interest a person has in —

(a) any lawfully established existing activity , whether or not authorised by or under any Act or regulations, including rights of access , navigation, and fishing:

and;

(c) in considering the effects of an activity on existing interests,

to "have regard to":21

(a) the area that the activity would have in common with the existing interest; and

(b) the degree to which both the activity and the existing interest must be carried out to the exclusion of other activities; and

(c) whether the existing interest can be exercised only in the area to which the application relates; and

(d) any other relevant matter.

4.3 Clearly, Origin have a lawfully established existing activity in the Kupe

Gas Field. They have existing rights of access to the petroleum

resources under PML 38146, including rights of access to petroleum

under TTR's proposed marine consent area. Section 162 of the EEZ

Act provides that activities involving existing structures or submarine

pipelines that are associated with mining for petroleum authorised by

a petroleum mining permit granted under s 25 of the CMA may

21 EEZ Act, s 60.

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continue without a marine consent for the term of the permit.22

Origin's existing interests in the area have been previously recognised

by the EPA, including in a ruling issued under s 162(2) of the EEZ Act

in November 2014.23

4.4 Accordingly, under section 59(2) any effects on those interests must

be "take[n] into account". In considering what those effects might be,

the factors listed in paragraph 4.2(c) above under s 60 of the EEZ Act

provides some specific matters to consider, as well as a wide catch-all

discretion to take any relevant matter into account.

4.5 In our submission, the duty - coupled with the information principles24

and other requirements25 - requires the DMC to:26

(a) make every reasonable effort to understand what the effects

could be;

(b) where the applicant has provided scant information, or simply

made assertions, to make inquiries and test the position

and/or seek further information ("make full use of its powers"

- addressed further below); and

(c) if insufficient information has been provided, to consider

whether caution therefore requires the application be

declined, or, alternatively, stringent conditions imposed

(including proper adaptive management).

4.6 As the DMC will be aware, this was largely the process followed

during the first application for consent by TTR which resulted in the

DMC declining the application. Origin has not seen (to date) sufficient

differences in the material provided by TTR (as it relates to Origin's

interests) that suggest that a different approach should now be taken.

22 As it was on the day before the EEZ Act came into force: EEZ Act, s 162(4). 23 Decision Memorandum for Ruling Request EEZ0113ORG, dated 24 November 2014. 24 Refer s 61 of the EEZ Act, to which we return below. 25 EEZ Act, s 59(2)(j), (l) and (m). 26 Refer to Bleakley v Environmental Risk Management Authority [2001] 3 NZLR 213

(HC) for discussion of the meaning of "take into account" at [72].

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Information principles

4.7 The DMC is required to ("must") make full use of its powers to request

information from the applicant, obtain advice, and commission a

review or a report; base decisions on the best available information;

and take into account any uncertainty or inadequacy in the information

available.27

4.8 One qualifier to this is that the "best information" is defined to mean:28

the best information that, in the particular circumstances, is available without unreasonable cost, effort, or time.

4.9 However, we doubt that it would have been unreasonable for TTR to

have produced - or the DMC to have required - better information,

modelling, and evaluation addressing potential effects on the Kupe

JVPs' interests. This is particularly so given Origin has maintained a

number of concerns in its engagement with TTR since early 2014,

during both the first application and its preparation and subsequent

lodgement of this consent application.

4.10 Section 61 establishes a "cascade approach":

(a) in circumstances where the EPA has not been able to make

full use of its powers to obtain "the best available

information"29 (or has the applicant itself has failed or refused

to produce that information); and

(b) where, therefore, there is uncertainty and/or inadequacy in

the information available;30

(c) the DMC must "favour caution and environmental

protection".31

27 EEZ Act, s 61(1)(a)-(c). 28 EEZ Act, s 61(5). 29 Section 61(1)(a) and (b). 30 Section 61(1)(c). 31 Section 61(2).

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4.11 That same approach must in the circumstances include applying

caution to protect existing interests. (Before refusing the application, it

is accepted that an adaptive management approach must be

considered.32) The clear inference from sections 59, 60, and 61 is that

the onus (in respect of adverse effects on existing interests) remains

on the applicant to satisfy the EPA that the relevant statutory tests are

met. It is not sufficient for an applicant to be able to point to regulatory

restrictions generated through an entirely separate statutory regime,

and then for the onus for regulation above those restrictions to fall

upon the party with the existing interest.

Adaptive management

4.12 In Minute 17,33 the DMC invited legal counsel to address in their

opening submissions at the hearing a range of matters relating to

adaptive management. We do so below.

Section 87F(4)

4.13 Section 87F was introduced via the Marine Legislation Bill 2012, which

substantially amended the Maritime Transport Act and the EEZ Act to

provide the EPA with the ability to regulate discharges within the EEZ

and Continental Shelf of New Zealand. There is limited commentary

in the legislative background surrounding s 87F(4), but Parliament's

intent to exclude adaptive management considerations from any

conditions that could be imposed on a discharge consent is clear from

the words used and their surrounding context.

Applicability of the Augier principle

4.14 Origin accepts that, consistent with the approach taken in a number of

RMA cases,34 conditions can be offered and attached to the discharge

consent by the DMC that sit outside of its legislative powers, where

the Augier principle is used.

32 Section 61(3). 33 M17 - Minute of the Decision-Making Committee in respect of section 87F(4) of the Act, 3 February 2017. 34 See, for example, the High Court's decision in Frasers Papamoa Limited v Tauranga City Council (2009) 15 ELRNZ 279, [2010] NZLR 202.

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Ability to separate activities in respect of applying conditions

4.15 Origin accepts that there are some difficulties separating out the

activities that relate to the "mining" consent, and the "discharge" that

follows via re-sedimentation. However, Origin submits that it would

not be a lawful approach to circumvent the express exclusion of

adaptive management conditions (regarding that re-sedimentation) on

the discharge consent, by instead attaching the same conditions to

the mining consent. That approach would run the risk of failing the

established test for conditions under the RMA, applying the Newbery

thresholds, in that the proposed conditions could not reasonably relate

to the activity for which consent is being sought for.

Scope of the definition of adaptive management

4.16 We wish to emphasise the need for any adaptive management

approach to require, where there are significant adverse effects or

unanticipated adverse effects, the activity to be reduced in scale or

discontinued. The latter is explicitly recognised as a potential

outcome of an adaptive management approach in s 64(2)(b).35

4.17 It has also been recognised as a requirement, in appropriate

circumstances, in RMA cases - for example in the conditions attaching

to the New Zealand King Salmon marine farm consents.36 In that

case, the Board also outlined four requirements that must be satisfied

for adaptive management to be an acceptable approach to managing

environmental effects of activities:37

[a] There will be good baseline information

about the receiving environment;

[b] The conditions provide for effective

monitoring of adverse effects using

appropriate indicators;

35 EEZ Act, s 64(2)(b). 36 Board of Inquiry's decision in New Zealand King Salmon Requests for Plan Changes

and Applications for Resource Consent Blenheim, 22 February 2013. 37 Board of Inquiry's decision in New Zealand King Salmon Requests for Plan Changes

and Applications for Resource Consent Blenheim, 22 February 2013, at [181].

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[c] Thresholds are set to trigger remedial

action before the effects become overly

damaging; and

[d] Effects that might arise can be remedied

before they become irreversible.

4.18 The key questions are whether:

(a) an adaptive management approach can remedy the

deficiencies in information or lack of assessment of effects on

existing interests? and;

(b) if so, whether the conditions proposed actually achieve an

appropriate adaptive management approach, or if they leave

the consent holder with too much room to move, and avoid

the EPA requiring TTR to reduce, relocate or stop its

activities if necessary?

4.19 The DMC needs to take great care in the construction of conditions, to

ensure that they will achieve the outcomes it anticipates. Origin

accepts that the test requires a "proportionate approach to risk which

involves identifying both the probability of an adverse effect and the

cost of its consequences", and that therefore "conditions do not have

to be completely certain" as certainty – and validity – will always be a

question of degree.38

Relevance of RMA planning instruments

4.20 A question this morning related to the relevance of the Regional Policy

Statement in the event effects are to be experienced in the territorial sea.

While not binding on this DMC, it may be of assistance to note that in

relation to the first application, the DMC observed:

(a) There is no requirement to give effect to, or have any regard to,

the subordinate documents prepared under the RMA.39

38 Aubade NZ Ltd v Marlborough District Council [2015] NZEnvC 154 at [35]. 39 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754].

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(b) However:

(i) Many of the effects will occur in the coastal marine

area, rather than the EEZ, and should be considered;40

(ii) The New Zealand Coastal Policy Statement

("NZCPS"), Regional Policy Statement ("RPS") and

Regional Coastal Plan give guidance as to the

important values within the coastal marine area, and it

is appropriate for them to be considered.41

Precautionary approach

4.21 The Honourable Dr Nick Smith, in the Committee of the Whole House

reading of the Exclusive Economic Zone and Continental Shelf

(Environmental Effects) Bill 2012, stated that the reason the wording

"favour caution" was used in the Bill, rather than the phrase

"precautionary approach", was to avoid the legal uncertainty that the

use of the precautionary approach has created under the RMA.42

4.22 In our submission, there is little difference between the need to "favour

caution" and the well-understood principles that apply to the

precautionary approach.43 Where there is uncertainty as to effects,

such as in respect of those on Origin's interests, significant care (or

"caution") needs to be taken to ensure that existing interests are

protected. If there is doubt, that should be resolved in favour of the

existing interests by declining consent.44

Liability

4.23 An impact between the IMV and the Kupe Wellhead Platform or

pipeline could cause structural damage to Origin infrastructure and

40 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754] and [759]. 41 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754] and [760]. 42 (21 August 2012) 683 NZPD 460. 43 This was apparently accepted by the DMC which considered the Chatham Rock

Phosphate application, where at [838] it appeared to find little difference or practical import between the terms "precaution" and "caution"; and that those constructs should be used interchangeably.

44 Echoing the approach to notification taken by the High Court in Progressive Enterprises Ltd & Anor v North Shore City Council & Anor [2006] NZRMA 72 (HC) at [73].

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result in an uncontrolled hydrocarbon discharge.45 The environmental

consequences of such a discharge are potentially catastrophic. The

EEZ regime does not contain an appropriate mechanism for TTR to be

held responsible or prosecuted in the event that its activities result in

an uncontrolled hydrocarbon discharge from Origin infrastructure.

Liability lies with the owner of the infrastructure from which the

discharge originates.46 Accordingly, Origin seek that any conditions of

consent indemnify the JVPs, should TTR's activities cause damage to

Origin infrastructure.

5. SPECIFIC EFFECTS ON ORIGIN'S INTERESTS

5.1 We briefly outline key effects on Origin below. They can be broadly

separated into two categories:

(a) effects on existing infrastructure / operations; and

(b) effects on future operations.

5.2 Origin's witnesses address these effects in detail in their statements of

evidence. That evidence consists of statements from internal

employees within Origin, who have significant experience in the oil

and gas industry, and statements from external third party experts

engaged by Origin to review TTR's latest application. To the extent

that Origin's employees give evidence during the course of this

hearing on expert matters, that experience and expertise should not

be undermined simply because those witnesses are employed by

Origin. In all instances, the views of Origin's internal experts (both

during the first application, and this latest application) have been

corroborated by the independent experts engaged by Origin to review

the material.

5.3 Origin has also filed a statement of evidence from Mr Martin Aylward,

who was party to the discussions that took place in the lead-up to this

latest application, and provides evidence regarding some of Origin's

concerns.

45 Refer Evidence of Owen Hobbs at [6.3] and Evidence of Iain Currill at [4.14]-[4.39]. 46 Acknowledging that the Act provides for defences to operators where discharges are arise on a 'no fault' basis.

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5.4 Additionally, by way of scene setting, it is important to understand that

the consequence of any interference with the Kupe operations is

significant. If something were to happen to the existing infrastructure

causing operations to cease, it could result in losses of $1 million per

day of stopped production or losses in the billions if the infrastructure

is damaged beyond repair. Moreover, significant damage to Origin

infrastructure could result in an uncontrolled hydrocarbon discharge,

the consequences of which are potentially catastrophic.47

Existing infrastructure / operations

5.5 TTR's activities will:

(a) Pose and increase the risk of a collision / significant impact

on the Kupe Wellhead Platform, pipeline or umbilical, or other

infrastructure (such as Wellhead no. 4):

(i) Clearly, the greater number of vessels operating in

proximity to the Kupe infrastructure, the greater the

risk of a collision event, impact or anchor dragging

across infrastructure. If an impact caused major

damage to platform infrastructure, liquids could flow

uncontrolled at a rate of 5,500 barrels per day into

the STB, until the wells could be plugged or

capped.48

(ii) Origin has significant concerns with the class

notation for the IMV and its mooring configuration,

given a lack of inbuilt redundancy and the design

criteria used.49

(iii) Proximity is also an issue. Obviously, the closer the

vessels are to Kupe assets, the greater the risk. A

specific condition requiring TTR's activities to be

undertaken at least 1.5km from the Kupe platform

should be imposed (to reflect, in Origin's view, a 47 Evidence of Owen Hobbs at [4.14] and [6.3]. See also Evidence of Iain Currill at [4.13]-[4.34]. 48 Evidence of Iain Currill at [4.13]-[4.34], particularly [4.23]. 49 These concerns are based upon AMOG's third party expert review of the IMVs classification and mooring design, attached to the evidence of Christopher Carra as Appendix B. Specifically, see [2.1]-[2.2].

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minimum safe distance between the two operations

based on the specifications contained in the

application) ).50 In respect of the currently capped

well located within the TTR marine consent area, or

future infrastructure, an exclusion zone of 500 m

should also apply.

(iv) The residual risks should also be addressed through

a condition requiring an indemnity and appropriate

insurance to the maximum reasonably obtainable on

the market. (If TTR is correct and the risk is minimal,

then securing insurance should not be an issue.)

(b) Result in changes to undersea currents and wave velocity,

with potential impacts on the in-place stability of the pipeline

and umbilical. In particular:

(i) The ocean is an unpredictable environment. When

the Kupe infrastructure was being installed a number

of issues arose, even though specific modelling was

undertaken.51

(ii) TTR has failed to provide any detailed assessment

of the oceanographic environment as it relates to the

Kupe interests; how the TTR mining activities may

alter that environment; and what the impact could be

on those interests.52 Any material change in seabed

currents and wave loadings could increase the

stress on the pipeline and umbilical in particular,

while pits and mounds created during mining

operations may migrate, potentially causing pipeline

spanning or burial.53

50 This is reflected in Origin's submission on the application, 12 December 2016. 51 Evidence of Iain Currill, [3.4] – [3.36]. The extent of the work undertaken to understand the environment and effects is illustrated by the attachments to Mr Currill's evidence. 52 Evidence of Iain Currill, at [4.51]. Noting that TTR have committed to completing

baseline monitoring and ongoing environmental management and monitoring plans. See also Appendix A to the Evidence of Robert Overy at [5]: the OCEL report on jack-up rig operations does not address the practical problems mining operations will pose to jack-ups.

53 Evidence of Christopher Carra at [4.7] and Appendix B at [3.2].

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(iii) Baseline and operational monitoring may enable

changes to be detected; but there must be a

requirement in conditions to modify or cease

operations if necessary to avoid damage to the Kupe

infrastructure.

(c) Impact on inspection, maintenance, and repair because of

reduced visibility:

(i) The Kupe JVPs currently undertake ROV surveys to

monitor their infrastructure on a regular basis, and to

investigate any emergency situations that arise. To

be efficient and effective, that requires horizontal

underwater visibility of no less than 5 m.54

(ii) TTR has not undertaken baseline modelling or

monitoring at the Kupe site, or undertaken a

modelling exercise to specifically determine how

frequently the Kupe JVPs visibility will be adversely

affected, or if adversely affected, how long those

effects will last once mining has stopped.55

(iii) Specific conditions, including requirements for TTR

to modify its activities, need to be imposed to ensure

the Kupe JVPs can monitor, maintain and repair

their infrastructure.

Future operations

5.6 TTR's activities, if approved, will impact on the Kupe JVPs' ability to

develop and utilise the petroleum resource in the remainder of its

permit area due to conflict with TTR activities. Impacts will include:

(a) Interference with timing and potential locations: a petroleum

well (or other infrastructure), seismic acquisition surveys, and

iron sand mining activities cannot exist or be carried out at

the same location at the same point in time. Mining vessels

and anchors present physical barriers to hydrocarbon

54 Evidence of Iain Currill at [4.50]. 55 Evidence of Iain Currill at [4.51].

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surveys while operational noise and changes to bathymetry

and seabed density reduce the quality of gathered data and

increase costs.56 As bringing drilling rigs and associated

support vessels and infrastructure to New Zealand is a

significant undertaking, it is almost always co-ordinated with

other companies to share costs and risks. Any delays caused

by mining operations might therefore cause the Kupe JVPs to

miss their window of opportunity, making it uneconomic to

develop their field, and leaving stranded assets.57

(b) Operational risks and additional investigation and installation

costs: the mined and disturbed seabed that would be created

by TTR's proposed operations poses very significant

geostability challenges and risks for the installation and

operation of jack-up rigs, and the placement and attachment

of subsea infrastructure.58 At a minimum, there will be

significant additional costs (and potential risks) associated

with that. While quantifying those costs is exceedingly

difficult (as there will be little "before" data as to the precise

physical nature of the specific areas of seabed), it has been

estimated TTR's mining operations will add an additional $10

– 17 million NZD per well alone.59 Again, the costs and risks

could be such that the Kupe JVPs would not proceed, when

they otherwise might have done so.60

(c) Process and procedure: The Kupe JVPs will likely need

marine consent for any new development within its mining

permit area. If marine consent is granted to TTR, it will

become an existing interest; any effect of the Kupe JVPs'

future activities on TTR's activities would need to be

considered and TTR could oppose the grant of marine

consent to the Kupe JVPs, potentially limiting the Kupe JVPs

access to resources it is entitled to.

56 Evidence of Iain Currill at [5.28] – [5.28]. 57 Evidence of Iain Currill at [6.5] – [6.9]. See also Appendix B to the Evidence of Christopher Carra at [4.3]. 58 Appendix A to the Evidence of Robert Overy, at [5] and [11]. See also Appendix B to the Evidence of Christopher Cara at [4.1]. 59 Evidence of Iain Currill at [6.7]. 60 Evidence of Iain Currill at [6.9].

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6. SPECIFIC CONDITIONS

6.1 Conditions are essential to the exercise of a consent in a manner that

will ensure that effects are appropriately avoided, remedied, or

mitigated - and contained within known and accepted levels. In the

context of "proposals of national significance" under the RMA's EPA-

Board of Inquiry process, across 15 proposals, the number of

conditions often exceeds 250. They are usually proposed in a

comprehensive form at the time of lodgement, updated in evidence,

submitted at the start of the hearing (having taken into account

submitter evidence), and again after conferencing.

6.2 The conditions proposed at the time of lodgement were not "shaped"

by consultation with Origin, and did not address the concerns clearly

expressed by Origin in relation to the first application.61 The evidence

of Mr Carra set out the concepts that would need to be incorporated

into the proposed conditions which, in addition to the 1.5km exclusion

zone sought through Origin's submission, would be required to

address the concerns of the Kupe JVPs. Following the submission of

that evidence, TTR have made contact regarding the potential for

amended conditions to address Origin's concerns with the application.

As noted by Mr Holm in opening, a first draft of conditions was

received yesterday and is currently being reviewed. An update as to

progress will be provided when Origin's evidence is presented on 16

March. As this process has only recently commenced, and has

certainly not yet reached resolution (and nor is there a guarantee it

will), the formal position for now remains as set out in the submission

and evidence.

61 Refer to the Evidence of Ian Currill at [2.7] and Martin Aylward at [3.14] where both witnesses note they consider TTR's pre-lodgement engagement with Origin was simply designed to show the DMC some form of consultation had been undertaken, rather than to reach agreement on outstanding issues.

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7. CONCLUDING REMARKS

7.1 If the DMC is minded to grant marine consent to TTR, despite the lack

of information and uncertainty as to effects on the Kupe JVPs, it must

be granted on appropriate conditions including those conditions

proposed by the Kupe JVPs.

DATED 16 February 2017

B S Carruthers / D Owen

Counsel for Origin Energy Resources Kupe NZ Limited , on behalf of the Kupe Joint Venture Parties

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Appendix 1 - Diagram showing overlap in permit area