MARINE CONSENT OMV New Zealand Limited Whio-1—located ... · 1. OMV New Zealand Limited (OMV) has...

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MARINE CONSENT

OMV New Zealand Limited

Whio-1—located within the South Taranaki Bight

EXCLUSIVE ECONOMIC ZONE AND CONTINENTAL SHELF (ENVIRONMENTAL EFFECTS) ACT 2012 OMV New Zealand Limited Whio-1 – located within the South Taranaki Bight Marine Consent Decision

Application To drill up to two exploratory wells using a semi-submersible drilling vessel and to undertake

post-drill monitoring. More specifically, the application seeks approval for the following

activities:

• the construction, placement, alteration, extension, removal or demolition of a structure on

or under the seabed (section 20(2)(a));

• the construction, placement, alteration, extension, removal, or demolition of a submarine

pipeline on or under the seabed (section 20(2)(b));

• the removal of non-living natural material from the seabed or subsoil (section 20(2)(d));

• the disturbance of the seabed or subsoil in a manner that is likely to have an adverse

effect on the seabed or subsoil (section 20(2)(e));

• the deposit of anything or organism in, on, or under the seabed (section 20(2)(f));

• the destruction, damage, or disturbance of the seabed or subsoil in a manner that is

likely to have an adverse effect on marine species of their habitat (section 20(2)(g)); and

• the construction, mooring or anchoring long-term, placement, alteration, extension,

removal, or demolition of a structure or part of a structure (section 20(4)(a)).

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Decision

Pursuant to section 62(1)(a) – Decisions on applications for Marine Consents – of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 ( the EEZ Act), the application for a Marine Consent by OMV New Zealand Limited is GRANTED.

The reasons for granting the Marine Consent, along with the conditions applying to its exercise, are set out below in this decision (pursuant to section 69 – Decision of the Environmental Protection Authority – of the EEZ Act).

Executive summary

1. OMV New Zealand Limited (OMV) has applied for a Marine Consent under the EEZ Act to continue

its drilling programme for an exploration well, known as Whio-1, to identify possible oil accumulations

near the Maari wellhead platform, located within the South Taranaki Bight.

2. OMV submitted an impact assessment (IA) for the Whio-1 well to the Environmental Protection

Authority (EPA) in June 2013 under the transitional provisions of the EEZ Act as the activity was a

‘planned petroleum activity’ under that Act. The EPA reviewed and accepted the IA as complete

under section 166 of the EEZ Act, allowing OMV to commence the activity without a Marine Consent.

However, the drilling was not able to be completed before 28 June 2014 meaning that OMV had to

lodge an application for a Marine Consent to complete any unfinished drilling as well as to conduct

the post-drilling monitoring activities. The application was lodged on 3 June 2014. On that basis,

OMV may continue with its drilling programme whilst the Marine Consent is being considered by the

EPA.

3. The application seeks to drill one exploratory well. However, in the event that problems arise in

drilling the well, OMV also seeks authority (as part of this application) to plug and abandon the well

and drill a second well near the first well.

4. An IA supported the application for Marine Consent as required under section 38 of the EEZ Act.

5. The Whio-1 well will be drilled from a semi-submersible drilling vessel called the Kan Tan IV (KTIV)

in a water depth of 98 metres. The well is planned to be drilled to a total depth of 2,839 metres

(measured along-hole), being 2,714 metres below the drill table.

6. The EPA, which is the consent authority, appointed us as the Decision-making Committee (DMC) to

consider and make a decision on OMV’s application.

7. Our decision is to grant consent. The reasons for this decision are summarised here and fully set out

in the rest of this decision.

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8. In making our decision, we have taken into account the decision-making criteria set out in sections

59 and 60 of the EEZ Act and have applied the information principles in section 61 of that EEZ Act.

As required, we have addressed the effects of the proposal on the environment and on existing

interests, using what we have determined is the best available information, and we have also

considered the extent to which imposing conditions under section 63 of the EEZ Act might avoid,

remedy or mitigate the adverse effects.

9. In summary, on the information that we have been presented by OMV, EPA staff and other

organisations, in reaching our decision in accordance with sections 59 to 61 of the EEZ Act, we are

also therefore satisfied that the purpose of the EEZ Act will be achieved.

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Table of contents 1. Structure of the decision ............................................................................................................ 7

1.1. Abbreviations and acronyms used in this decision ............................................................. 8

2. Introduction/background ............................................................................................................ 9

2.1. The role of the EPA and Decision-making Committee ....................................................... 9 2.2. The applicant and the proposal as applied for .................................................................... 9

2.2.1. The applicant .......................................................................................................... 9

2.2.2. The proposal as applied for.................................................................................... 9

2.2.3. Activities subject to approval ................................................................................ 10

2.2.4. Other activities associated with the application ................................................... 11 2.3. Procedural history ............................................................................................................. 12

2.3.1. Timeline ................................................................................................................ 12

2.3.2. Changes to 3 June 2014 application .................................................................... 12

2.3.3. Requests for information ...................................................................................... 12

2.3.4. EPA organisational report .................................................................................... 12 2.4. Context of application ........................................................................................................ 13

2.4.1. Transitional provisions ......................................................................................... 13

2.4.2. Commencement of activity ................................................................................... 13

2.4.3. Non-notified discretionary consents ..................................................................... 13

2.4.4. Compliance with other statutory requirements..................................................... 14

2.4.5. Concluding comments .......................................................................................... 14 2.5. The decision-making process ........................................................................................... 14 2.6. Description of the existing environment ............................................................................ 15

2.6.1. Physical environment ........................................................................................... 16

2.6.2. Biological environment ......................................................................................... 16

2.6.3. Cultural, social and economic environments ....................................................... 17

2.6.4. Existing interests .................................................................................................. 17

3. Statutory framework and overview of the decision in relation to that framework ............. 18

3.1. Introduction ........................................................................................................................ 18 3.2. Purpose and principles of the EEZ Act ............................................................................. 18

3.2.1. Purpose ................................................................................................................ 18

3.2.2. International obligations ....................................................................................... 19

3.2.3. Treaty of Waitangi ................................................................................................ 20 3.3. Section 20 – restrictions on activities in exclusive economic zone and continental shelf. 20 3.4. Decision-making criteria .................................................................................................... 21 3.5. Information principles ........................................................................................................ 23

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3.5.1. Full use of powers ................................................................................................ 24

3.5.2. Best available information .................................................................................... 24

4. Context for consideration and evaluation .............................................................................. 26

5. The effects of the proposal on the environment .................................................................... 27

5.1. Introduction ........................................................................................................................ 27 5.2. Benthic and planktonic communities ................................................................................. 27

5.2.1. The issues ............................................................................................................ 27

5.2.2. The effects............................................................................................................ 28

5.2.3. Conditions ............................................................................................................ 29

5.2.4. Findings ................................................................................................................ 29 5.3. Marine mammals ............................................................................................................... 30

5.3.1. The issues ............................................................................................................ 30

5.3.2. The effects............................................................................................................ 30

5.3.3. Conditions ............................................................................................................ 31

5.3.4. Findings ................................................................................................................ 31 5.4. Seabirds ............................................................................................................................ 31

5.4.1. The issues ............................................................................................................ 31

5.4.2. The effects............................................................................................................ 31

5.4.3. Conditions ............................................................................................................ 32

5.4.4. Findings ................................................................................................................ 32 5.5. Human health .................................................................................................................... 33

5.5.1. The issues ............................................................................................................ 33

5.5.2. The effects............................................................................................................ 33

5.5.3. Conditions ............................................................................................................ 33

5.5.4. Findings ................................................................................................................ 34 5.6. Effects outside the EEZ ..................................................................................................... 34

5.6.1. The issues ............................................................................................................ 34

5.6.2. Conditions ............................................................................................................ 34

5.6.3. Findings ................................................................................................................ 35

6. Unplanned events...................................................................................................................... 36

6.1. The issues ......................................................................................................................... 36 6.2. The effects ......................................................................................................................... 36 6.3. Conditions ......................................................................................................................... 38 6.4. Findings ............................................................................................................................. 38

7. The effects on existing interests ............................................................................................. 40

7.1. Identifying existing interests .............................................................................................. 40 7.2. Commercial fishing ............................................................................................................ 40

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7.2.1. The issues ............................................................................................................ 40

7.2.2. The effects............................................................................................................ 40

7.2.3. Conditions ............................................................................................................ 41

7.2.4. Findings ................................................................................................................ 41 7.3. Marine traffic...................................................................................................................... 41

7.3.1. The issues ............................................................................................................ 41

7.3.2. The effects............................................................................................................ 41

7.3.3. Conditions ............................................................................................................ 42

7.3.4. Findings ................................................................................................................ 42 7.4. Māori interests ................................................................................................................... 42

7.4.1. The issues ............................................................................................................ 42

7.4.2. Ngā Kaihautū Tikanga Taiao................................................................................ 43

7.4.3. EPA report ............................................................................................................ 44

7.4.4. Findings ................................................................................................................ 44

8. Cumulative effects..................................................................................................................... 45

9. Economic benefits to New Zealand ......................................................................................... 46

10. Marine management regimes ................................................................................................... 47

11. Efficient use and development of natural resources ............................................................. 48

12. Best practice .............................................................................................................................. 49

13. Adaptive management .............................................................................................................. 50

14. Summary of findings ................................................................................................................. 51

15. Commentary on conditions ...................................................................................................... 53

15.1. Introduction ........................................................................................................................ 53 15.2. Conditions of particular note ............................................................................................. 53

16. Decision ...................................................................................................................................... 55

17. Conditions .................................................................................................................................. 56

APPENDIX 1 PROCEDURAL HISTORY .............................................................................................. 59

APPENDIX 2 OBSERVATIONS FROM THE DMC .............................................................................. 61

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1. Structure of the decision

1. This decision is structured as follows:

(a) Section 1 sets out the abbreviations and acronyms we have used.

(b) Section 2 sets out the introduction and background to the application, drawing on the procedural

history set out in Appendix 1. We also present a description of the environment summarised

from the OMV application information.

(c) Section 3 sets out the statutory framework and an overview of our decision in terms of that

framework.

(d) Section 4 presents a contextual introduction to our consideration and evaluation.

(e) Section 5 addresses the effects of planned activities on the environment.

(f) Section 6 addresses the effects of unplanned activities on the environment.

(g) Section 7 addresses the effects of planned and unplanned activities on existing interests.

(h) Section 8 addresses cumulative effects.

(i) Section 9 sets out the economic benefits.

(j) Section 10 discusses the relevant marine management regimes.

(k) Section 11 addresses the efficient use and development of natural resources.

(l) Section 12 discusses industry best practice.

(m) Section 13 discusses adaptive management.

(n) Section 14 presents a summary of our findings.

(o) Section 15 provides a commentary on conditions.

(p) Section 16 is the decision of the DMC.

(q) Section 17 presents the conditions of the Marine Consent.

2. During consideration of this application, we have also noted a number of observations that we

consider the EPA and future applicants for exploratory wells should pay particular attention to, and

these are presented in more detail in Appendix 2. We are mindful that these observations are not

binding on OMV but are made to provide guidance for future similar applications processed by the

EPA. For the avoidance of doubt, the observations in Appendix 2 do not form part of our evaluation

and decision.

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1.1. Abbreviations and acronyms used in this decision 3. The abbreviations and acronyms used are as follows:

CMA Coastal marine area

DMC Decision-making Committee

DMP Discharge Management Plan

DoC Department of Conservation

EEZ Act Exclusive Economic Zone and Continental Shelf (Environmental Effects)

Act 2012

EEZ Exclusive economic zone

EPA Environmental Protection Authority

FMA Fishing Management Area

FPSO Floating production, storage and offloading vessel

IA Impact assessment

KTIV Kan Tan IV (semi-submersible drilling rig)

MMIA Marine Mammal Impact Assessment

MMR Marine management regime

MNZ Maritime New Zealand

MPI Ministry for Primary Industries

MTA Maritime Transport Act 1994

NKTT Ngā Kaihautū Tikanga Taiao

NZCPS New Zealand Coastal Policy Statement

OMV OMV New Zealand Limited

STB South Taranaki Bight

WHP Wellhead platform

WorkSafe WorkSafe New Zealand

EPA Report EPA Staff Report

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2. Introduction/background

2.1. The role of the EPA and Decision-making Committee

4. The EPA is the consent authority for activities within the EEZ and continental shelf beyond the 12

nautical mile limit from New Zealand’s coastline. One of its functions, pursuant to section 13(1) of the

EEZ Act, is to decide applications for Marine Consents.

5. The EPA may, pursuant to section 16(a) of the EEZ Act, delegate its power to consider and decide

an application for Marine Consent to a committee appointed under clause 14 of Schedule 5 of the

Crown Entities Act 2004. On 10 May 2013, pursuant to section 73 of the Crown Entities Act, the EPA

Board made a general delegation to every committee appointed under clause 14 of Schedule 5 of

the Crown Entities Act to decide a Marine Consent in terms of “all functions and powers of the EPA

relating to that matter under the EEZ Act, including, but not limited to those specified in the schedule

to this instrument of delegation”.

6. On 4 July 2014, the EPA Board appointed a DMC under clause 14 of Schedule 5 of the Crown

Entities Act 2004 to consider and make a decision on the Marine Consent application lodged by

OMV. The DMC comprises Mr David McMahon (Chair), Mr Tim Lusk (EPA Board Member) and Dr

Kaye Thorn.

7. In making a decision on this Marine Consent application, the DMC has acted independently from the

EPA.

2.2. The applicant and the proposal as applied for

2.2.1. The applicant

8. The applicant is OMV, a privately owned New Zealand company that has been operating in New

Zealand since 1999. It developed and operates the Maari and Manaia oilfields with its joint venture

parties (Todd Maari Limited, Horizon Oil International Limited and Cure Taranaki Pty Limited).

2.2.2. The proposal as applied for

9. The application before us seeks to drill one exploratory well, referred to as the Whio-1 exploration

well. However, in the event that problems arise in drilling that well, OMV also seeks, as part of this

application, authority to plug and abandon the well and drill a second well within approximately 50 m

of the first well.

10. The application is for a number of activities associated with OMV’s exploratory drilling programme,

including post-drill monitoring. The Whio-1 well is located within Petroleum Exploration Permit (PEP)

51313, and its purpose is to identify possible oil accumulations within close proximity to the existing

Maari well-head platform (WHP), called Tiro Tiro Moana, and the associated floating production,

storage and offloading (FPSO) vessel Raroa.

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11. OMV is utilising a semi-submersible drilling rig, the Kan Tan IV (KTIV), to drill the Whio-1 well, with

drilling having commenced (‘spudded’) on 23 July 2014.1 The application relates to those activities

that are yet to be completed that trigger a Marine Consent under the EEZ Act.

2.2.3. Activities subject to approval

12. OMV has sought a Marine Consent to continue and complete the drilling activity and post-drill survey

work under the EEZ Act as set out below:

OMV programme activity Consent required for EEZ Act provision

Anchoring and removal of

KTIV and associated

equipment

Construction, placement, alteration, extension,

removal or demolition of a structure or part of a

structure on or under the seabed within the

EEZ and continental shelf

s20(2)(a)

Disturbance of the seabed or subsoil in a

manner that is likely to have an adverse effect

on the seabed or subsoil within the EEZ and

continental shelf

S20(2)(e)

Construction, mooring or anchoring,

placement, alteration, extension, removal or

demolition of a structure or part of a structure

on or under the seabed within the EEZ

s20(3)(a)

Placement of the well

casing under the seabed

and placement of flexible

hose on the seabed to

transport drill cuttings and

drilling fluids to the KTIV

Construction, placement, alteration, extension,

removal or demolition of a submarine pipeline

on or under the seabed within the EEZ and

continental shelf

s20(2)(b)

Sample collection as part

of post-drilling benthic

monitoring

Removal of non-living natural material from the

seabed or subsoil within the EEZ and

continental shelf

s20(2)(d)




continental shelf

s20(2)(e)

Drilling and constructing Removal of non-living natural material from the


s20(2)(d)

1 OMV letter dated 13 August 2014.

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OMV programme activity Consent required for EEZ Act provision

the exploration well continental shelf




continental shelf

s20(2)(e)

Destruction, damage or disturbance of the

seabed or subsoil in a manner that is likely to

have an adverse effect on marine species or

their habitat

s20(2)(g)

Collection of drill cuttings

and hydrocarbons

Removal of non-living natural material from the


continental shelf

s20(2)(d)

Discharge and deposition

of drill cuttings, water-

based muds, cement and

cement slurry2 to the

seabed




continental shelf

s20(2)(e)

Deposit any thing or organism in, on or under

the seabed

S20(2)(f)

Destruction, damage or disturbance of the

seabed or subsoil in a manner that is likely to

have an adverse effect on marine species or

their habitat

s20(2)(g)

13. In accordance with section 36 of the EEZ Act, OMV’s activities are discretionary activities because

the activities are not classified in regulations made under the EEZ Act.

2.2.4. Other activities associated with the application

14. Section 59(2)(b)(i) of the EEZ Act requires us to take account of the effects of activities that are not

regulated under the EEZ Act when considering an application for a Marine Consent. There are a

number of activities associated with the OMV project that are not covered by way of a Marine

Consent under the EEZ Act but that need to be considered as part of the overall assessment under

section 59(2). These ancillary activities include:

(a) discharges from the KTIV into the water column

2 The application form lodged as part of the application did not specify ‘cement’, but the IA did cover cement discharges. The DMC requested clarification on this matter from OMV, and it subsequently advised the DMC that cement discharge was in fact part of the application.

12

(b) discharges to air and effects on air quality

(c) navigational safety

(d) lighting

(e) visual effects

(f) seismic activity.

15. Some of the above matters are regulated under other statutes under the marine management

regime. For example, vessel navigation is controlled under the Maritime Transport Act 1994.

Notwithstanding this, the ambit of the DMC and the EEZ Act allows us to take into account these

issues and, where necessary, to impose conditions on the Marine Consent so long as such

conditions do not conflict with a measure required in relation to the activity by another marine

management regime or the Health and Safety in Employment Act 1992.

2.3. Procedural history

2.3.1. Timeline

16. The procedural history of the application is set out in detail in Appendix 1.

2.3.2. Changes to 3 June 2014 application

17. OMV withdrew part of the application that was lodged on 3 June 2014 relating to the use of an

explosive charge within the well.3

18. OMV also clarified that the application includes discharges of surplus cement and cement slurry.4

2.3.3. Requests for information

19. The EEZ Act allows the EPA to request information from a variety of sources. Prior to the DMC being

appointed, EPA staff requested information from OMV, DoC, MPI, WorkSafe and MNZ. In addition,

the DMC has requested further information from OMV as well as NKTT, WorkSafe and MNZ. Full

details of the further information requests and the responses received are presented in Appendix 1.

2.3.4. EPA organisational report

20. Prior to the appointment of the DMC, EPA staff, under delegated authority, commissioned a report

from itself under section 44(1)(b) of the EEZ Act. This report was received by the DMC on 8 August

2014. This report is referred to in this decision as the EPA report.

21. We have also been provided with an internal EPA staff memorandum on the further information

requested from OMV by EPA staff prior to the DMC being appointed.5 That further information from

OMV was received on 1 August, and the memorandum – which constitutes an addendum to the EPA

report – was received by the DMC on 13 August.

3 OMV supplementary information provided to the EPA on 16 June 2014. 4 OMV letter dated 13 August 2014. 5 EPA memorandum from T Davies to R Johnson dated 6 August 2014.

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2.4. Context of application

2.4.1. Transitional provisions

22. The Whio-1 exploration well is part of OMV’s ongoing Exploration, Appraisal and Development

Drilling (EADD) programme within the South Taranaki Bight (STB). OMV proposed drilling between

three and five new exploration and appraisal wells as part of its EADD, one of which is the Whio-1

well. These activities are classified under the EEZ Act as being ‘planned petroleum activities’ and are

therefore covered under the transitional provisions of that Act. Section 166 of the EEZ Act allowed

such activities to commence without a Marine Consent after the EEZ Act came into force, provided

an impact assessment (IA) was submitted to the EPA beforehand.

23. OMV submitted an IA for the Whio-1 well to the EPA in June 2013, and the EPA reviewed and

accepted the IA as complete under section 166 of the EEZ Act. The transitional period ended on 28

June 2014, meaning that OMV was required to apply for a Marine Consent for those activities not

completed by this date. OMV planned to finish its EADD by 28 June 2014. However, drilling of the

Whio-1 well was not able to be completed before this date due to weather and operational

constraints, meaning that OMV was required to lodge an application for a Marine Consent.

24. We note here that, had weather conditions been kinder to OMV and had the other delays not

occurred, OMV may well have finished drilling the Whio-1 well by 28 June 2014, no Marine Consent

would have been needed for the drilling activity and authorisation would only be required for the

post-drill monitoring.

2.4.2. Commencement of activity

25. We were advised by OMV that it commenced drilling the Whio-1 well on 23 July 2014.6 As provided

for by section 166(5)(b) of the EEZ Act, OMV is allowed to continue with its drilling activities while its

application for a Marine Consent is being considered by the EPA.

2.4.3. Non-notified discretionary consents

26. The activities that are the subject of OMV’s application relate to exploration drilling of petroleum in

the EEZ and, in accordance with Regulation 5 of the Exclusive Economic Zone and Continental

Shelf (Environmental Effects – Non-notified Activities) Regulations 2014, the activities are classified

as non-notified discretionary activities. We note here that this is essentially the most permissive of

the two activities classifications that apply to Marine Consents (the other being fully discretionary).

27. Regulations that describe activities as non-notified may only be made if the Minister for the

Environment is satisfied (as set out in section 29D of the EEZ Act) that the activity:

(a) has a low probability of significant adverse effects on the environment or existing interests, and

(b) is routine or exploratory in nature, or

(c) is of brief duration.

6 OMV letter dated 13 August 2014.

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28. The Minister was satisfied that exploration activities met these requirements, and hence the

regulations were introduced making such activities non-notified discretionary.

2.4.4. Compliance with other statutory requirements

29. OMV is also required to comply with a number of statutory requirements outside of the EEZ Act in

respect to the proposed activities. These are discussed in the IA as well as the EPA report. A

number of these other requirements include environmental considerations, and these are relevant to

the Marine Consent application in front of us.

2.4.5. Concluding comments

30. There are a number of matters that make OMV’s application unique in terms of the EEZ Act, and

these form an important context for our consideration, namely:

(a) the activities could have been completed without a Marine Consent if delays had not occurred

and weather conditions were better

(b) OMV has commenced drilling

(c) OMV is permitted to continue with its drilling while we are making a decision on its application

(d) the activities are classified as non-notified discretionary, the most permissive of the two activity

classifications under the EEZ Act.

31. Although the above matters are important and set the scene in terms of OMV’s application, we are

cognisant of our requirement to fully consider the application in terms of the decision-making

principles that apply to all Marine Consent applications. That is, we have not been unduly influenced

by the uniqueness of OMV’s application and the fact that OMV has commenced drilling activities in

coming to a decision on this application. However, the fact that drilling has commenced has, by

necessity, influenced the conditions that we have imposed. This is discussed in more detail later in

this decision.

2.5. The decision-making process

32. The EEZ Act establishes demanding timeframes for the processing of and decision-making on

applications for non-notified Marine Consents – being 50 working days from the date that the

application is deemed to be complete by the EPA. The timeframe has been a source of considerable

challenge not only for the DMC but also EPA staff and the MMR organisations from which further

information was requested.

33. EPA staff and the DMC have both requested information from a number of MMR organisations

(discussed in more detail earlier in this decision). The DMC would like to thank those who have

provided information to help us make a decision on this application, particularly as some of the

information provided is commercially sensitive. The DMC is aware that these requests have, in some

cases, been comprehensive and have required significant effort on the part of staff in those

organisations to respond in a timely manner. The DMC is grateful for the responses received, as the

information provided to us has been essential background to this application.

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34. The activities are classified as non-notified meaning that there is no public notification and no ability

for submissions to be lodged. The EEZ Act does, however, require the EPA to serve a copy of non-

notified applications on iwi authorities, customary marine title groups and protected customary rights

groups that are affected by the application.7 In addition, the EPA served a copy of the application on

other persons or organisations it considered to be appropriate.8

35. Section 44B of the EEZ Act allows the EPA to hold a hearing for non-notified activities if it considers

this necessary or desirable, and if the applicant requests it, a hearing must be held. We have

determined that no hearing is necessary, and OMV has not requested one.

36. The DMC has met on four occasions (outlined in Appendix 1) to assess whether further information

was necessary and to deliberate. We have based our decision on the written evidence provided to

us, namely:

(a) the application and its supporting technical documents and impact assessment9

(b) the completeness assessment report commissioned by EPA staff

(c) additional information supplied by the applicant at the request of EPA staff10

(d) advice from other agencies with responsibility for other marine management regimes11

(e) advice from Ngā Kaihautū Tikanga Taiao in the form of a written report

(f) various additional information supplied by the applicant at our request

(g) the EPA report.12

37. Because no hearing was held, we have not had the benefit of directly questioning the authors of the

above documents and reports. However, where further clarification of the contents of the documents

and reports was necessary, we have sought this from the author(s), including the applicant and the

contributors to the EPA report.

38. We note here that this is the first non-notified activity that has been considered by the EPA, and as

such, there has not been a set format or procedure that we have been able to follow. Whilst this has

generated a certain freedom in establishing a procedure and approach to our decision-making, we

have identified some areas where improvements to the process could be achieved across the board

in the case of future applications. We have taken the opportunity to identify these matters later in this

decision document (see Appendix 2).

2.6. Description of the existing environment 39. The existing environment is well described in the application,13 and the EPA report concludes that

the IA is thorough and accurate in this respect.14 We agree with this and do not intend to repeat that 7 Section 44A(a) of the EEZ Act. 8 Section 44A(b) of the EEZ Act. 9 Section 39 of the EEZ Act. 10 Sections 42 and 43 of the EEZ Act. 11 Idem. 12 Section 44(1)(b) of the EEZ Act.

16

uncontested information in any great detail. Rather, we have summarised the key points in the

following sections.

2.6.1. Physical environment

40. The Whio-1 well location is within the STB, approximately midway between the South Taranaki

coastline and Farewell Spit. The well is located in approximately 98 m of water.

41. The STB is exposed to intense weather systems from the Tasman Sea and is subject to high winds

and seas particularly in winter. Ocean winds, currents and tides produce an active water column

that, in the locality, appears well mixed during July. However, there can be seasonal levels of

stratification due to solar heating.

42. The seafloor is dominated by silt and muds that exhibit mounds and holes (indicating they are

reworked by life forms) and wave-induced ripples. The marine seabed environment generally

appears to be a uniform physical environment with low diversity of environmental conditions.

2.6.2. Biological environment

43. The benthic community largely consists of worms and shellfish that can readily recover from

sediment deposition.

44. The South Taranaki Bight has some of the most extensive zooplankton biomass of all coastal

regions in New Zealand.

45. A rich range of fish life passes through the area, but there are no permanent fish species due to the

lack of habitat (e.g. reefs).

46. The area is not often fished by recreational fishers, and the main commercial catch in the locality is

jack mackerel and barracuda.

47. The northward migration of humpback whales is likely to pass through the area in June/July,

although pregnant females tend to migrate in late spring. Blue whales have also been sighted in the

area throughout the year (including July). The southern right whales’ northern migration passes

through the area between May and October. Dolphins (Hector’s, Maui’s and common) visit the

Taranaki coastline. The common dolphin has been observed in the area of the well site.

48. Fur seals are present year round in offshore Taranaki waters and have a continual presence at the

Taranaki platforms. The breeding season is around November to January. Pups are generally born

in January and weaned in July.

49. OMV has provided information15 on the likelihood of various marine mammals being present within

the STB during the drilling period. This ranges from ‘unlikely’ (sei whales) to ‘likely’ (blue whales,

beaked whales, common dolphins, long-finned pilot whales and New Zealand fur seals). OMV states

13 IA section 3. 14 EPA report paragraph 71. 15 OMV letter dated 1 August 2014.

17

that there have not been any known or reported incidents with whales from oil and gas operations in

this area.16

50. A wide range of seabirds are present throughout the year (e.g. albatrosses, petrels, terns and

penguins).

51. There are bird-breeding colonies on the coastline from Taranaki around to Farewell Spit. These

include five species on the New Zealand Threat Classification System list.

52. There are a number of marine reserves and conservation areas around the coastline from Taranaki

to Farewell Spit.

2.6.3. Cultural, social and economic environments

53. There are no customary areas, taiāpure, rohe moana or mātaitai reserves under the Fisheries Act

1993 in the vicinity of the Whio-1 location. The IA notes that the Whio-1 location is close to or within

the rohe of some Taranaki iwi. There are currently no settlements of historical claims under the

Treaty of Waitangi Act 1975 of specific relevance to the proposed activity. However, the EPA report

states the existence of claims to the Waitangi Tribunal relating to petroleum (e.g. Claim WAI 796).17

As these have not been settled, they are not considered to be existing interests under the EEZ Act,

and accordingly, we have not considered these claims any further.

54. Shipping between the Ports of Taranaki and Nelson passes through the locality. The general area is

classified (2007) as a ‘precautionary area’ by the International Maritime Organization due to the

presence of shipping and offshore petroleum activity.

55. The South Taranaki coast contains some of New Zealand’s most popular surfing spots. In addition,

Abel Tasman National Park, Whanganui River National Park and Farewell Spit and Kapiti Island

nature reserves are important tourist areas.

56. OMV states that there are no known shipwrecks or heritage sites in the area surrounding the well

site based on a search of a number of information sources.18

2.6.4. Existing interests

57. The identified existing interests (as per the definition in the EEZ Act) are commercial fishing and

traversing commercial shipping. The IA considers Māori interests to be ‘other interests’.19 Further

discussion on existing interests is presented in section 7 of this decision.

16 OMV letter dated 1 August 2014. 17 EPA report paragraph 144. 18 OMV letter dated 1 August 2014. 19 IA section 3.8.

18

3. Statutory framework and overview of the decision in relation to that framework

3.1. Introduction 58. We set out here the statutory framework under which we have made our decision on this Marine

Consent application and an overview of our decision. This section is set out under the following

headings:

(a) Introduction

(b) Purpose and principles of the EEZ Act

(c) Section 20 – restrictions on activities in exclusive economic zone and continental shelf

(d) Decision-making criteria

(e) Information principles

3.2. Purpose and principles of the EEZ Act

3.2.1. Purpose

59. Section 10(1) states:

“The purpose of this Act is to promote the sustainable management of the natural resources of the

exclusive economic zone and the continental shelf.”

60. ‘Sustainable management’ is defined in section 10(2) as follows:

“In this Act, sustainable management means managing the use, development, and protection of

natural resources in a way, or at a rate, that enables people to provide for their economic well-

being while—

(a) sustaining the potential of natural resources (excluding minerals) to meet the reasonably

foreseeable needs of future generations; and

(b) safeguarding the life-supporting capacity of the environment; and

(c) avoiding, remedying, or mitigating any adverse effects20 of activities on the environment.”

61. The things to be sustainably managed under the EEZ Act are the “natural resources of the exclusive

economic zone and continental shelf”. Section 4(1) of the EEZ Act defines natural resources as:

“(a) in relation to the exclusive economic zone, includes seabed, subsoil, water, air, minerals, and

energy, and all forms of organisms (whether native to New Zealand or introduced); and

(b) in relation to the continental shelf, means the mineral and other non-living resources of the

seabed and subsoil and sedentary species.”

20 The term ‘effects’ is broadly defined in section 6 of the EEZ Act.

19

62. The EEZ Act definition of sustainable management in section 10(2) refers to “managing the use,

development, and protection of natural resources in a way, or at a rate, that enables people to

provide for their economic well-being”.

63. The matters that must be achieved at the same time as economic wellbeing is enabled21 include22

“safeguarding the life-supporting capacity of the environment”. Section 4 of the EEZ Act defines

‘environment’ as:

“the natural environment, including ecosystems and their constituent parts and all natural

resources, of—

(a) New Zealand:

(b) the exclusive economic zone:

(c) the continental shelf:

(d) the waters beyond the exclusive economic zone and above and beyond the continental

shelf.”

64. Section 10(3) of the EEZ Act is important and states:

“In order to achieve the purpose, decision-makers must—

(a) take into account decision-making criteria specified in relation to particular decisions; and

(b) apply the information principles to the development of regulations and the consideration

of applications for Marine Consent.”

65. The decision-making criteria referred to in section 10(3)(a) are contained in sections 59 and 60 of the

EEZ Act, and the information principles are particularly found in section 61. We discuss these

provisions in some detail later.

3.2.2. International obligations

66. Section 11 of the EEZ Act states:

“This Act continues or enables the implementation of New Zealand’s obligations under various

international conventions relating to the marine environment, including—

(a) the United Nations Convention on the Law of the Sea 1982:

(b) the Convention on Biological Diversity 1992.”

67. New Zealand’s international obligations do not require additional considerations to be applied in

addition to the decision-making criteria and information principles contained in the EEZ Act. This is

because those international obligations are already in part encapsulated in the principles of the EEZ

Act. In this respect, we note that the emphasis in section 59(2)(d) and (e) on the importance of

protecting sensitive aspects of the environment and in section 61 on taking into account uncertainty

21 As required by the use of the word ‘while’. 22 Section 10(2)(b) of the EEZ Act.

20

or inadequacy in information, and in the requirement to favour caution and environmental protection

where information is inadequate or uncertain, all form central components of the framework by which

the EEZ Act enables the implementation of New Zealand’s obligations under international marine

conventions.

3.2.3. Treaty of Waitangi

68. Section 12 of the EEZ Act states:

“In order to recognise and respect the Crown’s responsibility to give effect to the principles of the

Treaty of Waitangi for the purposes of this Act,—

(a) section 18 (which relates to the function of the Māori Advisory Committee) provides for

the Māori Advisory Committee to advise the Environmental Protection Authority so that

decisions made under this Act may be informed by a Māori perspective; and

(b) section 32 requires the Minister to establish and use a process that gives iwi adequate

time and opportunity to comment on the subject matter of proposed regulations; and

(c) sections 33 and 59, respectively, require the Minister and the EPA to take into account

the effects of activities on existing interests; and

(d) section 45 requires the Environmental Protection Authority to notify iwi authorities,

customary marine title groups, and protected customary rights groups directly of consent

applications that may affect them.”

69. Those matters of cultural relevance are addressed through the EPA’s obligation to notify relevant

Māori groups of consent applications, the ability for the DMC to receive specialist advice on matters

pertaining to Māori from the NKTT (the Māori Advisory Committee)23 and the requirement to take into

account the effect of activities on existing interests,24 which includes the interests of Māori.

70. In addition to the above, we acknowledge the Waitangi Tribunal claim over oil and gas in the region

(Claim WAI 796) discussed earlier.

3.3. Section 20 – restrictions on activities in exclusive economic zone and continental shelf

71. Section 20 of the EEZ Act specifies that a range of activities in the exclusive economic zone or on

the continental shelf can only be undertaken if authorised by a Marine Consent. How the activities

comply, or otherwise, with section 20 of the EEZ Act has been presented in section 2.2.3 of this

decision.

23 Established under section 18 of the EEZ Act. 24 As defined in section 4 of the EEZ Act.

21

3.4. Decision-making criteria 72. The key sections of the EEZ Act that outline the matters that we must consider in coming to a

decision are sections 59 and 60, which state:

“59 Environmental Protection Authority’s consideration of application

(1) This section and sections 60 and 61 apply when the Environmental Protection Authority is

considering an application for a Marine Consent and submissions on the application.

(2) The EPA must take into account—

(a) any effects on the environment or existing interests of allowing the activity, including—

(i) cumulative effects; and

(ii) effects that may occur in New Zealand or in the waters above or beyond the

continental shelf beyond the outer limits of the exclusive economic zone; and

(b) the effects on the environment or existing interests of other activities undertaken in the

area covered by the application or in its vicinity, including—

(i) the effects of activities that are not regulated under this Act; and

(ii) effects that may occur in New Zealand or in the waters above or beyond the

continental shelf beyond the outer limits of the exclusive economic zone; and

(c) the effects on human health that may arise from effects on the environment; and

(d) the importance of protecting the biological diversity and integrity of marine species,

ecosystems, and processes; and

(e) the importance of protecting rare and vulnerable ecosystems and the habitats of

threatened species; and

(f) the economic benefit to New Zealand of allowing the application; and

(g) the efficient use and development of natural resources; and

(h) the nature and effect of other marine management regimes; and

(i) best practice in relation to an industry or activity; and

(j) the extent to which imposing conditions under section 63 might avoid, remedy, or mitigate

the adverse effects of the activity; and

(k) relevant regulations; and

(l) any other applicable law; and

(m) any other matter the EPA considers relevant and reasonably necessary to determine the

application.

(3) The EPA must have regard to—

22

(a) any submissions made and evidence given in relation to the application; and

(b) any advice, reports, or information it has sought and received in relation to the

application; and

(c) any advice received from the Māori Advisory Committee.

(4) When considering an application affected by section 74, the EPA must also have regard to the

value of the investment in the activity of the existing consent holder.

(5) Despite subsection (3), the EPA must not have regard to—

(a) trade competition or the effects of trade competition; or

(b) the effects on climate change of discharging greenhouse gases into the air; or

(c) any effects on a person’s existing interest if the person has given written approval to the

proposed activity.

(6) Subsection (5)(c) does not apply if the person has given written approval but the person

withdraws the approval by giving written notice to the EPA—

(a) before the date of the hearing, if there is one; or

(b) if there is no hearing, before the EPA decides the application.

60 Matters to be considered in deciding extent of adverse effects on existing interests

In considering the effects of an activity on existing interests under section 59(2)(a), the

Environmental Protection Authority must have regard to—

(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.”

73. We make the following general observations on these two sections of the EEZ Act:

(a) The extensive list of matters that must be taken into account under section 59(2) contains no

explicit internal hierarchy, and the relative importance of different considerations will vary

depending on the specifics of each application, the nature of the environment and the extent and

nature of existing interests. That said, we note that the consideration under sections 59(2)(d) and

59(2)(e) include the qualifying words “the importance of protecting”, which are not used in any of

the other sub-clauses and suggests that Parliament intended that there needs to be a particular

emphasis on the protection of the intrinsic value of important biological resources.

(b) While the activities for which consents are being sought by the applicant are taking place in the

EEZ, we need to take into account effects of those activities on the environment not just within

23

the EEZ but also the continental shelf and the coastal marine area (CMA) that forms part of the

territorial waters of New Zealand.25 This clear requirement to take into account effects that are

likely to arise from allowing the activity, including when those effects occur outside the exclusive

economic zone, is important, as some of the potential adverse effects (particularly in relation to

an unplanned event such as an oil spill) may occur within the CMA.

(c) Section 59(2)(m) is a catch-all provision and requires us to consider any other matter we think is

relevant and reasonably necessary to determine the application. The extensive list of matters in

section 59(2)(a)–(l) means that there are unlikely to be many matters that fall into this residual

category.

(d) Whereas section 59(2) sets out matters we “must take into account”, section 59(3) lists three

sources of information we “must have regard to”, namely any evidence given to us, any advice or

reports we have sought and any advice from the Māori Advisory Committee. We record that we

have had regard to these sources of information in reaching our decision.

(e) We do not attach special significance to the difference in wording between “must take into

account” in section 59(2) and “must have regard to” in section 59(3). The listed matters in both

subsections are obligatory considerations; the importance of or weight to be given to each matter

is to be determined by the nature of the proposal and the evidence.

(f) Section 59(4) does not apply in this case as OMV is not an existing Marine Consent Holder for

this activity.

(g) We have not had regard to either of the matters described in section 59(5)(a) and (b), and

section 59(5)(c) is not relevant because we were presented with no written approvals from the

holders of existing interests.

(h) We have assessed the effects on existing interests26 having regard to the factors listed in section

60, and we discuss this further when we consider the different types of existing interests in

section 7 of this decision.

3.5. Information principles 74. Section 61 of the EEZ Act is directive and states:

“61 Information principles

(1) When considering an application for a Marine Consent, the Environmental Protection Authority

must—

(a) make full use of its powers to request information from the applicant, obtain advice, and

commission a review or a report; and

(b) base decisions on the best available information; and

25 See the definition of ‘environment’ in section 4 of the EEZ Act. 26 Sections 59(2)(a) and 59(2)(b) of the EEZ Act.

24

(c) take into account any uncertainty or inadequacy in the information available.

(2) If, in relation to making a decision under this Act, the information available is uncertain or

inadequate, the EPA must favour caution and environmental protection.

(3) If favouring caution and environmental protection means that an activity is likely to be refused,

the EPA must first consider whether taking an adaptive management approach would allow the

activity to be undertaken.

(4) Subsection (3) does not limit section 63 or 64.

(5) In this section, best available information means the best information that, in the particular

circumstances, is available without unreasonable cost, effort, or time.”

75. We now discuss the requirements of this section and how they have been applied in our

consideration of this application.

3.5.1. Full use of powers

76. Section 61 of the EEZ Act focuses on ensuring that we have available to us the right amount and

quality of information to be able to make a good decision. We read this provision to be telling us that

it may not be sufficient for us to rely only on the information that is presented to us by the applicant

and by EPA staff and that we need to be prepared to obtain additional information should this be

considered necessary.

77. In considering the application, we have had the benefit of:

(a) the application and its supporting technical documents and impact assessment27

(b) additional information supplied by OMV at the request of EPA staff and directly by us28

(c) advice from other agencies with responsibility for other MMRs29

(d) advice from NKTT in the form of a written report

(e) the EPA report.30

78. Having regard to the above list of material presented to us, we are satisfied we have met our

responsibility under section 61(1)(a) of the EEZ Act.

3.5.2. Best available information

79. Pursuant to section 61(1)(b), we must make our decision on the best available information. ‘Best

available information’ is defined in section 61(5), and it is important to note that it is not necessarily

all available information, nor is it all information that the applicant or EPA staff asks us to take into

account. Rather, we are required to exercise some judgement about what information is the best

available information for this particular application, having regard to issues of cost, effort and time. 27 Section 39 of the EEZ Act. 28 Section 42 and 43 of the EEZ Act. 29 Idem. 30 Section 44(1)(b) of the EEZ Act.

25

80. One of the key documents relevant to this application is the Discharge Management Plan (DMP). We

requested a full copy of this from both OMV and MNZ. However, we were only provided partial

documentation and have not had the benefit of viewing the entire DMP. Whilst this is a significant

limitation, we have chosen to impose conditions requiring full reporting on relevant matters to

mitigate the lack of information.

81. On the above basis, we have therefore determined that we have had regard to the best available

information.

26

4. Context for consideration and evaluation

82. Section 59 of the EEZ requires us to consider a number of matters. These are evaluated and

considered as follows:

(a) Section 5 covers effects of the planned activities on the environment.

(b) Section 6 covers unplanned events.

(c) Section 7 covers effects on existing interests.

(d) Section 8 covers cumulative effects.

(e) Section 9 covers economic benefits.

(f) Section 10 covers marine management regimes.

(g) Section 11 covers efficient use of natural resources.

(h) Section 12 covers best practice.

(i) Section 13 covers adaptive management.

83. The discussion on the topics listed in sections 5 to 7 is organised under the following sub-headings:

(a) The issues

(b) The effects

(c) Conditions

(d) Findings

84. The remaining sections present generic discussion and also our findings on those topics.

85. The DMC was presented with a large number of recommended conditions in the EPA report and

proffered by OMV in its IA. In addition, conditions were recommended by DoC, MNZ and MPI. Many

of these conditions were drafted on the basis that the drilling operations had not yet commenced.

86. We have relied heavily on OMV complying with its legal requirements under various statutes within

the MMR and that, if such compliance is achieved, many of the potential environmental effects will

also be mitigated and environmental risks reduced to the greatest extent practicable.

87. However, it is likely that the drilling will be nearly finished by the time this decision is issued, and the

DMC has therefore dispensed with many of the conditions either proffered by the applicant or

recommended in the EPA report. The following sections that touch on conditions should therefore be

read with this context in mind. We note here that, had the activity not yet commenced, some of the

recommended and proffered conditions may well have been imposed, and further conditions may

well have been added to this Marine Consent.

88. We comment further on our approach to condition setting in section 15.

27

5. The effects of the proposal on the environment

5.1. Introduction

89. Sections 59(2)(a) and 59(2)(b) of the EEZ Act require us to take into account the effects on the

environment of allowing the activity. In this section, we discuss the information contained in the

application and the EPA report. We present our findings on the most significant effects on the

environment of the ‘planned’ activities, these being those effects that will or are very likely to occur

as a result of the drilling operations and for which OMV has applied for consent.

90. The most significant effects of the planned activities will be on:

(a) benthic and planktonic communities

(b) marine mammals

(c) seabirds

(d) human health.

91. The above effects are discussed in the following sections with an additional section covering effects

of the activities outside the EEZ.31

92. The effects are well described in the IA, and a good commentary is provided in the EPA report.

These documents also include a comprehensive assessment of other relatively minor effects not

discussed in the following sections. The DMC generally concurs with the assessments and

conclusions reached in both the IA and the EPA report. We have therefore deliberately not repeated

much of the material in this decision.

93. In our findings, we have used the same environmental risk category terms as presented in Table 15

of the IA.32 Environmental risk is a combination of the ‘likelihood’ of an adverse effect occurring and

the ‘consequence’ should the effect occur, and for these two variables, we have also used the same

terms33 as are presented in the table. We make the observation here that, whilst we generally agree

with the consequence rankings for each effect assessed by OMV, we consider that the likelihood of

the effects occurring is, for some of the effects, potentially underestimated by OMV in its IA. For

consistency of interpretation, we have reassessed the likelihood of the effect occurring, although we

note that the overall impact on the decision is minimal.

5.2. Benthic and planktonic communities

5.2.1. The issues

94. We are required to take into account the importance of protecting the biological diversity and integrity

of marine species, ecosystems and processes (section 59(2)(d) of the EEZ Act). The benthic and

planktonic communities are clearly part of this. 31 Section 59(2)(b)(ii) of the EEZ Act. 32 IA page 108. 33 In the following sections, these terms are shown in single quotes (e.g. ‘almost certain’).

28

95. We consider the main issues associated with effects on benthic and planktonic communities to be:

(a) placement and withdrawal of the anchors of the KTIV

(b) drilling into the seabed

(c) deposition of sediment on the seabed around the drill hole

(d) discharge of sediment and other contaminants into the water column

(e) deposition of sediment further away from the drill hole where drill cuttings, drilling muds, cement

and/or cement slurry settle onto the seabed

(f) the post-drill monitoring.

5.2.2. The effects

96. Seabed disturbance will result in the loss of habitat and direct destruction of benthic communities in

the area of disturbance. The disturbance that is expected to occur involves:

(a) anchor drag scars – being between 55 and 85 m and disturbing between 2,640 and 4,080 m2 of

seabed (for all eight anchors) in the area around the KTIV

(b) the well hole – a 36” (900 mm) diameter hole on the seabed with the possibility of a second well

of the same diameter being drilled if needed

(c) grab samples for post-drill monitoring – annual grab samples at 23 sample stations with triplicate

samples collected at each station (i.e. a total of 69 grab samples each year). Each grab sample

will disturb 0.2 m2 of seabed and will remove 0.02 m3 of material.

97. Deposition of sediment onto the seabed can smother benthic communities. Deposition that is

expected to occur is as follows:

(a) Up to 55 m3 of drill cuttings will be deposited in the immediate vicinity of the well before the

riserless mud recovery system is installed, and approximately 300 m3 of drill cuttings will be

discharged into the water column.

(b) Within 10 m of the well, it is predicted that 0.3–0.5 m deep deposits will accumulate, with deposit

depths decreasing away from the hole. The fate of the drill cuttings discharged from the KTIV is

dictated by oceanic conditions, but the deposition is likely to be confined within 200–250 m of the

KTIV, with deposition expected to be in the order of 0.1 mm at this distance. These figures are

based on a single exploratory well being drilled. Information from post-drilling monitoring at Maari

indicates the extent of deposition is less than the modelling suggested for that site.

98. The discharge of drill cuttings, drilling muds, cement and/or cement slurry increases turbidity of the

water column, which can affect planktonic communities. In addition, the water-based muds contain

chemicals that have the potential to affect planktonic communities through toxicity effects. However,

the water-based muds proposed to be used are low toxicity, and no oil-based muds are to be used.

29

99. The IA has assessed these effects, and the EPA report provides a review of the effects. Both OMV

and EPA staff conclude that the environmental risk on benthic and planktonic communities of the

activities is low because:

(a) the area of disturbance is relatively small

(b) whilst the depth of material that will be deposited is relatively thick immediately around the well,

the depth of material that will be deposited beyond this immediate area is very small

(c) the water-based muds have low toxicity

(d) benthic communities generally recover within one year around single-well sites.34

5.2.3. Conditions

100. A number of conditions that were proffered by OMV and recommended by EPA staff relate to the

activities that may affect benthic and planktonic communities. However, we are of the view that

requiring OMV to undertake the activity in accordance with the details contained in its application, in

particular, complying with the approved DMP and its Environmental Monitoring Programme, is

sufficient to deal with any adverse effects on benthic and planktonic communities.

101. The only additional condition that we have imposed that would avoid additional adverse effects

associated with disturbance is that which restricts OMV’s ability to drill a second well, if this is

required, to a location that does not require the anchors of the KTIV to be repositioned.

5.2.4. Findings

102. Impacts on the benthic and planktonic communities are the most significant effects of the planned

activities.

103. Having considered the information available, we find the following in respect to adverse effects on

benthic and planktonic communities:

(a) Disturbance of the seabed will occur during the placement and removal of the eight anchors, the

drilling of the well and collecting grab samples during post-drill monitoring, and we therefore find

that adverse effects are ‘almost certain’ to occur. We find that this disturbance will result in

‘minor’ adverse effects, resulting in a ‘medium’ environmental risk. In this regard, we disagree

with OMV who consider this risk to be ‘low’.

(b) Sediment will be deposited onto the seabed around the well from the drilling as well as from the

discharges of drill cuttings, drilling muds, cement and/or cement slurry from the KTIV, and we

therefore find that adverse effects are ‘almost certain’ to occur. We find that this deposition will

result in ‘minor’ adverse effects, resulting in a ‘medium’ environmental risk. In this regard, we

disagree with OMV who consider this risk to be ‘low’.

(c) The discharges of drill cuttings, drilling muds, cement and/or cement slurry into the water column

will occur, and we therefore find that adverse effects will be ‘almost certain’. We find that these

34 IA section 4.4.4.2.

30

discharges will result in ‘minor’ adverse effects. The environmental risk of this activity is

‘medium’.

5.3. Marine mammals

5.3.1. The issues


of marine species, ecosystems and processes (section 59(2)(d) of the EEZ Act) and also protecting

rare and vulnerable ecosystems and the habitats of threatened species (section 59(2)(e) of the EEZ

Act). Marine mammals are clearly part of this, and some are threatened species.

105. We consider the main issues associated with effects on marine mammals to be:

(a) noise from the drilling operations and support services (e.g. helicopters)

(b) presence of the KTIV and support structures

(c) collision with support vessels

(d) seismic surveys within the well.

5.3.2. The effects

106. Noise will be generated by the drilling operations, both above and below the water. In addition,

seismic testing within the borehole is proposed, which can affect marine mammals (acoustic damage

and behaviour changes). These effects will occur over a short duration, and OMV has prepared a

Marine Mammal Impact Assessment (MMIA), which has been approved by DoC for the seismic

testing (referred to as ‘check shot surveys’). DoC has advised that the MMIA is specific to the

seismic testing and not for the overall drilling operations. However, it considers that drilling

operations typically have fewer acoustic effects on marine mammals than seismic exploration.35

107. The presence of the KTIV and its support structures (anchoring lines) can cause physical

interference to mammals that may be migrating through the area. The IA states that most marine

mammals are able to use avoidance mechanisms to stay clear of drilling activities and structures.

However, such structures can be an attraction for seals.36

108. Collisions with vessels such as supply ships can occur. However, the IA states that there have been

no known incidents of marine mammal collisions in the STB to date.37

109. The IA has assessed these effects, and the EPA report provides a review of the effects. The EPA

report concludes that the risk to marine mammals of the activities is ‘low’, but OMV concludes that

the risk is ‘very low’ because:

(a) the duration of the activity is short

(b) there have been no known incidents of collisions with marine mammals in the STB by vessels 35 DoC letter dated 30 July 2014. 36 IA section 4.4.7.10. 37 IA section 4.4.7.10.

31

(c) it will comply with the MMIA approved by DoC.

5.3.3. Conditions

110. A number of conditions that were proffered by OMV and recommended by EPA staff and DoC38

relate to the activities that may affect marine mammals. However, we are of the view that requiring

OMV to undertake the activity in accordance with the details contained in its application, in particular,

complying with the MMIA approved by DoC, is sufficient to deal with any adverse effects on marine

mammals.

5.3.4. Findings


marine mammals:

(a) Noise will be generated during the drilling operations, and it is ‘possible’ that this noise will affect

marine mammals. However, any effects on those mammals will be ‘minor’. This results in a ‘low’

environmental risk. In this regard, we agree with the EPA report and not with OMV who consider

this risk to be ‘very low’.

(b) The likelihood of collisions occurring between marine mammals and either the KTIV (and its

support structures) or support vessels is ‘unlikely’. However, we find that the consequence of

any such collision would be ‘moderate’ as it could result in mortality of the animal that is hit. We

therefore find that the environmental risk is ‘low’, and in this regard, we agree with the EPA

report and not with OMV who consider this risk to be ‘very low’.

5.4. Seabirds

5.4.1. The issues


of marine species, ecosystems and processes (section 59(2)(d) of the EEZ Act) and also protecting

rare and vulnerable ecosystems and the habitats of threatened species (section 59(2)(e) of the EEZ

Act). Seabirds are clearly part of this, and some are threatened species.

113. We consider the main issues associated with effects on seabirds to be:


(b) presence of the KTIV and support structures

(c) lighting.

5.4.2. The effects

114. Noise will be generated by the drilling operations as well as from support services such as supply

vessels and helicopters. This noise can disturb seabirds. The KTIV is located approximately 75 km

38 DoC letter dated 30 July 2014.

32

off shore, and ambient noise levels are generally high due to wind and wave action. OMV states that

helicopter flight paths will avoid sensitive seabird roosting areas.

115. The presence of the KTIV and its support structures (including rigging) can result in seabird

collisions. In addition, lighting on the KTIV and supply vessels tends to attract seabirds and can lead

to disorientation, increasing the risk of bird collisions.

116. There is a rich range of seabirds in the STB area, some of which are nationally endangered or

threatened (eastern rockhopper penguin, Kermadec white-faced storm petrel, black-fronted tern,

black-billed gull, northern royal albatross and Hutton’s shearwater). These birds are extremely

unlikely to be affected by the drilling activities.

117. The IA has adequately assessed the adverse effects on seabirds and concludes that the risk is very

low because:

(a) the duration of the activity is short

(b) there have been no incidents to date since the KTIV has been operating in the STB

(c) helicopter flight paths will avoid any bird colonies.

5.4.3. Conditions

118. A number of conditions that were proffered by OMV and recommended by EPA staff and DoC39

relate to the activities that may affect seabirds. However, the DMC is of the view that requiring OMV

to undertake the activity in accordance with the details contained in its application is sufficient to deal

with any adverse effects on seabirds.

5.4.4. Findings


seabirds:

(a) Noise will be generated during the drilling operations, and it is ‘possible’ that this noise will affect

seabirds and any effects on those birds will be ‘minor’. This results in a ‘low’ environmental risk.

In this regard, we disagree with OMV who consider this risk to be ‘very low’.

(b) The likelihood of collisions occurring between seabirds and either the KTIV (and its support

structures) or support vessels is ‘unlikely’, and the consequence of any such collision would be

‘minor’. We therefore find that the environmental risk is ‘very low’.

39 DoC letter dated 30 July 2014.

33

5.5. Human health

5.5.1. The issues

120. We are required to take into account effects on human health that may arise from effects on the

environment (section 59(2)(c) of the EEZ Act). We consider the main issues associated with effects

of the planned activities40 on human health to be:


(b) use of hazardous substances

(c) discharges to air from vessels, machinery and plant.

5.5.2. The effects

121. The EPA report considers that, given the location of the Whio-1 drill site, the potential effects of the

proposed exploratory drilling (and related activities) on human health primarily relate to occupational

health and safety aboard the rig.41 We concur with this.

122. The IA indicates that the potential effects associated with hazardous substances will be addressed

through managing their use and storage. The IA states that OMV has an approved DMP, which

outlines the processes and protocols required to manage waste. MNZ has confirmed that it has

approved the DMP.42

123. In addition, we note that OMV has also submitted a Safety Case to WorkSafe, which has accepted

this document. The Safety Case identifies how hazards will be controlled and describes the safety

management system in place to ensure these controls are effectively and consistently applied.

124. Discharges to air from machinery and vessels will occur but are expected to dissipate very quickly

given the open and exposed nature of the drilling site.43 We agree with this assessment.

125. The IA concludes that the risk of air contaminants and hazardous substances on human health is

‘very low’, and the EPA report accepts this assessment as EPA staff do not have any evidence to

suggest otherwise.

5.5.3. Conditions


activities that may affect human health. However, the DMC is of the view that requiring OMV to

undertake the activity in accordance with the details contained in its application, in particular,

complying with the approved DMP approved by MNZ and the Safety Case accepted by WorkSafe, is

sufficient to deal with any adverse effects on human health.

40 The effects of unplanned activities on human health are discussed in section 6. 41 EPA report para 150. 42 MNZ letter dated 25 July 2014. 43 IA section 4.4.14.

34

127. We are also aware that OMV is required to comply with the Health and Safety in Employment Act

1992, the purpose of which is to promote the prevention of harm to all persons at work and other

persons in, or in the vicinity of, a place of work. We do not consider that a condition requiring

compliance with this legislation is needed on the Marine Consent.

5.5.4. Findings

128. Having considered the information available, we find that adverse effects on human health from the

planned activities, provided OMV complies with its Safety Case and the approved DMP, are

‘unlikely’, and if they do occur, they will be ‘minor’, resulting in a ‘very low’ risk.

5.6. Effects outside the EEZ

5.6.1. The issues

129. We are required to take into account effects on the environment from the activities that may occur

outside the EEZ (section 59(2)(a)(i) of the EEZ Act), this area being:

(a) the New Zealand land mass above mean high water springs

(b) the coastal marine area (CMA), being coastal waters extending 12 nautical miles seaward from

mean high water springs around the New Zealand’s coast

(c) the waters above those parts of the continental shelf not beyond the outer limits of the EEZ

(d) the waters beyond the outer limits of the continental shelf.

130. The IA states that the well site is 52 km from the CMA boundary off the Taranaki coast and 41 km

from the CMA boundary around Farewell Spit,44 and the planned activities will have no adverse

effects within either CMA area. The depositional footprint of the drill cuttings discharged from the

KTIV may settle up to 50 km from the vessel, but the depositional thickness is less than 0.1 mm

beyond 250 m from the release point.

131. The IA states that the effects from the planned activities will not extend outside the EEZ or

continental shelf.

132. OMV has assessed the environmental risk of adverse effects outside the EEZ as ‘very low’. We note

that the EPA report does not provide any specific commentary on effects outside the EEZ.

5.6.2. Conditions

133. No conditions were proffered or recommended in relation to potential effects of planned activities

outside the EEZ, and the DMC does not consider that any are required.

44 IA section 4.4.13.

35

5.6.3. Findings

134. Having considered the information available, we find that adverse effects outside the EEZ from

planned events are ‘unlikely’, and if they do occur, they will be ‘negligible’, resulting in a ‘very low’

risk.

36

6. Unplanned events

6.1. The issues

135. The preceding section of this decision (section 5) dealt with the environmental effects of the

‘planned’ activities that are the subject of OMV’s Marine Consent application. We have found that the

adverse effects are generally minor and relatively localised. However, it is the ‘unplanned’ events

that have the greatest potential for widespread and significant adverse effects.

136. We consider the main issue associated with effects of these unplanned activities to be the release of

liquid and gaseous hydrocarbons into water from:

(a) well blowout

(b) well integrity

(c) fuel spills from the KTIV or support vessels.

137. Well blowout is where the operator loses control of the well, resulting in the uncontrolled release of

hydrocarbons into the environment.

138. Well integrity refers to the control processes and well design/construction methods that are used to

ensure that uncontrolled releases of formation fluids do not occur or are minimised. This applies to

the entire life cycle of the well, including after the well is plugged and abandoned. If the well is not

plugged properly, there is a risk that hydrocarbons can enter the environment.

139. Fuel spills from vessels can occur as a result of human error, equipment failure or collisions. These

can release hydrocarbons into the sea.

6.2. The effects 140. The unplanned activities described above can affect the environment and can also affect health and

safety of personnel on the KTIV and support vessels.

141. Effects on the environment can occur as a result of hydrocarbons being released into the sea. Once

hydrocarbons are discharged into the sea, they can be transported by currents. The actual effects

depend on a large number of variables including the amount and type of hydrocarbons discharged,

weather conditions, sea conditions and intervention methods. Hydrocarbon spills can affect:

(a) benthic and planktonic communities

(b) marine mammals

(c) fish

(d) seabirds

(e) shoreline environments

(f) tourism and recreational activities

(g) existing interests, including commercial fishing, shipping and iwi (discussed in section7).

37

142. The type of unplanned event that will create the most significant effects is an oil spill arising from a

loss of well control during the drilling programme. The IA includes oil spill trajectory modelling

results, albeit for a nearby well location (Maari). The modelling shows the likely zones of impact on

the coastline should a spill occur as well as median number of days it would take for oil to reach

different parts of the coast. The modelling shows that the area of coastline most likely to be affected

is around Cape Egmont and Opunake,45 but oil could impact most of the west coast of the North

Island from Wellington north to Auckland and also the South Island from Cloudy Bay (near Blenheim)

around to the West Coast.46 We accept that the result of this modelling provides a good

approximation of fate of a significant oil spill from the well site.

143. The IA identifies that the variables that dictate the extent and magnitude of effects include the type of

oil, the species of wildlife in the area where the oil migrates, timing of breeding cycles and

migrations, and weather conditions.47

144. If an oil spill occurred, it has the potential to affect all wildlife and a wide variety of ecosystem

processes over the sea area where the oil is present and where it may wash up along the shoreline.

The IA describes these effects,48 and further details are provided in further information provided by

OMV.49 We agree with OMV’s assessment.

145. An oil spill will also affect recreational activities and tourism over the area affected by the oil,

including the popular surfing beaches along the South Taranaki coast.

146. Unplanned activities also pose a significant risk to personnel on the KTIV and support vessels.

147. The IA outlines the measures that will be in place and employed to reduce the likelihood of

unplanned events occurring. The most important of these are as follows:

(a) Compliance with the Safety Case that has been accepted by WorkSafe under the Health and

Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013. This document

identifies how hazards will be controlled and describes the safety management systems in place

to ensure these controls are effectively and consistently applied. Whilst the Safety Case is

primarily focused on protecting human health, compliance with it will also reduce the risk of oil

spills from the well into the wider environment.

(b) Compliance with the Spill Contingency Plan (SCP) approved by MNZ as part of the DMP, which

outlines how OMV will respond to, amongst other things, an oil spill.50

(c) Compliance with the Well Control Contingency Plan (WCCP), also approved by MNZ as part of

the DMP, which outlines the processes for responding to and safely managing well control

emergencies.51

45 OMV letter dated 1 August 2014. 46 Shown in Figure 44 of the IA. 47 IA section 4.5.2. 48 IA section 4.5.2. 49 OMV letter dated 1 August 2014. 50 IA section 4.1.1.

38

(d) Preparation of and compliance with a Well Abandonment Plan (WAP), which is required to be

prepared in accordance with the Health and Safety in Employment (Petroleum Exploration and

Extraction) Regulations 2013. This plan outlines how the well will be permanently plugged and

abandoned to ensure that the well’s integrity is maintained into the future and that formation

fluids are not released into the environment.52

148. OMV is required, under the Maritime Transport Act 1994, to hold a Certificate of Insurance, which

provides MNZ evidence that OMV has the minimum insurance requirements for meeting potential

liabilities for oil pollution.53 OMV has provided a copy of its Certificate of Insurance.54

149. OMV has advised55 that it is a highly experienced company having worked in offshore Taranaki since

1999, and it has a comprehensive Health, Safety, Security and the Environment (HSSE)

Management System in place.

6.3. Conditions

150. A number of conditions that were proffered by OMV and recommended by EPA staff and MNZ relate

to unplanned events, most of which sought to ensure compliance with requirements of various

legislation under the other MMRs. The DMC is of the view that requiring OMV to comply with its

Safety Case, the approved DMP (which includes the WCCP and the SCP) and the WAP is sufficient

to mitigate the risks of unplanned events occurring and also to deal with their environmental effects

should they occur.

6.4. Findings 151. We find that the consequences of unplanned events, in particular, a well blowout, would result in the

environmental effects significantly greater than those from any of the planned activities. The effects

of an unplanned oil spill could be widespread and would very likely result in serious harm to the

marine ecosystem and shoreline environments, including all fauna and flora that inhabit the affected

area, including threatened species.

152. We find that unplanned events can occur either as a result of unexpected conditions within the well

being experienced or due to human error(s). We find that operator error is the biggest risk to

unplanned events occurring. However, we are confident that OMV and the operator of the KTIV,

Frigstad Offshore Pte Limited, are experienced offshore operators and have appropriate procedures

and contingency plans in place to minimise the risks of such events occurring – many of which are

requirements and/or are approved under other MMRs.

153. Having considered the information available, we find the following in respect to unplanned activities:

(a) The likelihood of a well blowout occurring is ‘remote’, but if it did occur, the consequences could

be ‘massive’. This constitutes a ‘low’ environmental risk. 51 IA section 4.1.2. 52 IA section 2.2.10. 53 MNZ letter dated 25 July 2014. 54 OMV letter dated 15 August 2014. 55 OMV letter dated 15 August 2014.

39

(b) The likelihood of the well releasing hydrocarbons into the environment following its plugging and

abandonment is ‘remote’, but if it did occur, the consequences could be ‘massive’. This

constitutes a ‘low’ environmental risk.

(c) The likelihood of fuel spills from the KTIV and support vessels is ‘unlikely’, and the

consequences would be ‘minor’. We therefore find that the environmental risk is ‘very low’.

40

7. The effects on existing interests

7.1. Identifying existing interests

154. Sections 59(2)(a) and 59(2)(b) of the EEZ Act require the DMC to take account of any effects on the

environment or existing interests of allowing the activity. Section 60 of the EEZ Act provides more

guidance on matters to be considered in deciding the extent of adverse effects on existing interests.

The details of these sections of the EEZ Act are set out in section 3 of this decision.

155. The IA identifies the existing interests affected by the activities to be:

(a) commercial fishing

(b) marine traffic (referred to in the IA as traversing vessels).56

156. The cultural association of Māori to the marine environment is acknowledged by the IA, but it

considers these to be ‘other interests’ rather than existing interests.57 The EPA report states that

Māori interests may be existing interests under the EEZ Act.58 The report we received from NKTT

does state that the wide range of Māori interests in the EEZ are classified as existing interests under

the EEZ Act.59 We agree with NKTT and therefore discuss these effects below.

7.2. Commercial fishing

7.2.1. The issues

157. We consider the main issues associated with effects on existing commercial fishing interests to be:

(a) the presence of the KTIV and support structures and subsequent loss of access to fishing

grounds

(b) the discharges from the KTIV affecting primary production, which in turn may affect fish

abundance, and also the potential for contaminants to accumulate in fish that may be present in

the discharges

(c) the state of the seabed after the drilling is finished possibly creating a hazard for fishing

equipment.

7.2.2. The effects

158. The effects of the drilling activities on commercial fishing interests are well covered in the IA60 and

the EPA report.61 We agree with the IA and the commentary provided in the EPA report.

56 IA section 3.7. 57 IA section 3.8. 58 EPA report paragraph 131. 59 NKTT report paragraph 16. 60 IA section 4.4.7.1. 61 EPA report paragraphs 113–116.

41

159. The loss of access to fishing grounds will be temporary and covers a relatively small area. The

discharges will not adversely affect primary production and therefore will not, in turn, affect

commercial fish populations.62

160. OMV proposes to remove the well casing to a depth of at least 1.5 m below the seabed so there will

be no structures left on or above the seabed, resulting in no hazard for entanglement of fishing gear,

this being an issue raised by MPI.63

161. We note that MPI has expressed concerns that the discharges of drill cuttings and drilling muds, may

contain, contaminants such as polychlorinated biphenyls (PCBs), and that these could enter the food

chain of commercially harvested fish leading to potential bioaccumulation.64

7.2.3. Conditions

162. A number of conditions that were proffered by OMV and recommended by EPA staff and MPI relate

to the activities that may affect commercial fishing. However, we are of the view that requiring OMV

to undertake the activity in accordance with the details contained in its application, in particular,

complying with the approved DMP, is sufficient to deal with any adverse effects on commercial

fishing interests, including the potential effects of food chain contamination raised by MPI.

163. We do, however, consider that Condition 5 recommended in the EPA report should be imposed with

an additional requirement that OMV provides photographic evidence to confirm that no structures are

left on or above the seabed in and around the well site.

7.2.4. Findings

164. Having considered the information available, we find, in respect to effects on commercial fishing, that

the likelihood of effects is ‘possible’ and the effects to be ‘negligible’, resulting in a ‘very low’ risk. The

activities will occupy only a very small area of the STB, and the activities will be temporary. The

discharges will not affect fish either directly or indirectly through reduced primary production.

7.3. Marine traffic

7.3.1. The issues

165. We consider the main issues associated with effects on marine traffic to be the presence of the KTIV

and support structures creating a navigational hazard.

7.3.2. The effects

166. Commercial shipping routes in the STB are discussed in the IA,65 and the effects of the activities on

marine traffic are well covered in the IA66 and the EPA report.67 We agree with the IA and the

commentary provided in the EPA report.

62 IA section 4.4.7.1. 63 MPI letter dated 30 July 2014. 64 MPI letter dated 30 July 2014. 65 IA section 3.6.5. 66 IA section 3.7.2.

42

167. The IA states that the well site is within a ‘precautionary area’ established by the International

Maritime Organization (IMO),68 and all ships travelling through this area must navigate with particular

caution given the high level of offshore petroleum activity in the area.

168. The IA also states that the KTIV has automatic identification system (AIS) technology, which allows

its position to be monitored by other vessels, and the IMO requires all vessels in the precautionary

area to be fitted with AIS as a primary avoidance tool.69

169. OMV states that it will follow international law and the Maritime Transport Act 1994 (including

COLREGS) to prevent collisions and will issue Notices to Mariners of the shipping hazard.

7.3.3. Conditions


activities that may affect commercial shipping – most of these recommended conditions require OMV

to comply with its obligations under other MMRs. However, the DMC is of the view that requiring

OMV to undertake the activity in accordance with the details contained in its application is sufficient

to deal with any adverse effects on commercial shipping as all the MMR obligations are inherent in

the application material.

7.3.4. Findings

171. Having considered the information available, we find, in respect to effects on commercial shipping,

that the likelihood of an effect is ‘unlikely’, but if a collision did occur, the effects could be ‘major’,

resulting in a ‘low’ risk. In this regard, we disagree with OMV who consider this risk to be ‘very low’.

7.4. Māori interests

7.4.1. The issues

172. Māori have a wide range of interests in the EEZ including lawfully established existing activities,

rights and practices provided for through the settlement of historical and contemporary claims under

the Treaty of Waitangi settlements. The proposed activities have the potential to affect these

interests.

173. As noted earlier in this decision, there are no settlements of historical claims under the Treaty of

Waitangi Act 1975 that are of specific relevance to the proposed activities. However, there is a

contemporary claim to the Waitangi Tribunal relating to petroleum (Claim WAI 796). We have been

advised that, because these claims have not been addressed or settled by the Crown, they are not

considered to be existing interests under the EEZ Act.70 For this reason, we have no need to assess

this particular matter further.

67 EPA report paragraphs 117–120. 68 IA section 3.6.5. 69 IA section 4.4.7.2. 70 EPA report paragraph 144.

43

7.4.2. Ngā Kaihautū Tikanga Taiao

174. Ngā Kaihautū Tikanga Taiao (NKTT) is the EPA Māori Advisory Committee established under

section 18 of the Environmental Protection Authority Act 2011. It is an independent committee set up

to provide advice and assistance from a Māori perspective to the EPA on policy, process and

decision-making regarding the EEZ Act.

175. Section 59(3)(c) of the EEZ Act requires us to have regard to any advice received from the Māori

Advisory Committee.

176. NKTT considered the OMV application under section 44(1)(c) of the EEZ Act. In its report, NKTT

outlines the importance of the relationship that Māori draw from the Treaty of Waitangi. NKTT

helpfully provide explanations of the principles of partnership, active protection and rangatiratanga.

The report reminds us of the unique relationship Māori have as Treaty partners and the impact that

binding decisions can have on their ability to be afforded their Treaty rights and practices. NKTT has

recommended that we consider the proposed activities in terms of consistency with the principles of

the Treaty of Waitangi.

177. The NKTT report recommends that we provide for the ongoing kaitiakitanga role of Māori by

requiring OMV to maintain an ongoing relationship and engagement with relevant Māori existing

interests. NKTT has requested that this be made a condition of consent. The IA states that OMV has

undertaken extensive consultation and developed good relationships with Ngāti Ruanui, Ngā

Ruahine and the Taranaki Iwi Trust and that OMV is committed to developing these relationships

into the future.71 We therefore do not consider it necessary to impose such a condition on this Marine

Consent. Even if we had agreed that such a condition was necessary, the mechanics of constructing

and implementing such a condition would be very difficult to construct let alone enforce.

178. NKTT states that the primary economic interest Māori have in this application is in relation to

fisheries and its contribution to Māori development generally,72 with fisheries revenue often being the

main source of income for many iwi, and their reliance on the fishing industry is significant. NKTT

also acknowledges that Māori have the potential to gain economically from the proposed activity but

that the IA does not quantify this.

179. The NKTT report recognises that the planned activities are unlikely to significantly impact the

economic interests of Māori. However, large-scale unplanned events such as an oil spill may affect

commercial stocks of fish and will impact on availability of these ‘Treaty assets’.73

180. NKTT has also recommended that we give sufficient weight to the risk and consequential effects to

the right of iwi to develop economic opportunities and to manage their sustainable tribal growth,

which could occur as a result of an unplanned event.74

71 IA section 3.8. 72 NKTT report paragraph 20. 73 NKTT report paragraph 22. 74 NKTT report paragraph 23.

44

7.4.3. EPA report

181. The EPA report provides a useful discussion on Māori interests, cultural activities and cultural

associations. The EPA report also helpfully explains key Māori terms, which has assisted us

considerably.

182. The EPA report concludes that drilling operations and monitoring activities are ‘unlikely’ to have an

impact on whakapapa and mātauranga Māori. However, a significant oil spill would result in a

significant disruption to the intricate framework of relationships outlined in mātauranga Māori, in

particular, the ability for Māori to continue to undertake their cultural practices in the area, leading to

a loss of knowledge and association.75 Overall, the EPA report considers that risk of impact on

mātauranga Māori is likely to be low.

183. The EPA report also discusses the effects of the proposed activities on rangatiratanga and

kaitiakitanga and concludes that the risk of effects on these is likely to be low.

184. The EPA report presents information on the Treaty of Waitangi (Fisheries Claims) Settlement Act

1992, commonly referred to as the ‘Sealord Deal’. The risk of an oil spill poses potentially a

significant impact to the rights of Māori afforded by this settlement.

7.4.4. Findings

185. Having considered the information provided by NKTT and in the EPA report, we find that the effects

of the planned activities on Māori interests will be low but the effects of unplanned activities could be

extreme.

186. We have reached our decision having full regard to the principles of the Treaty of Waitangi.

187. We have acknowledged the risk and consequential effects on the right of iwi to develop economic

opportunities and to manage their sustainable tribal growth, which could occur as a result of an

unplanned event. We are satisfied that the conditions imposed adequately cover this risk.

75 EPA report paragraph 136.

45

8. Cumulative effects

188. We are required to take into account any cumulative effects on the environment or existing interests

of allowing the activity (section 59(2)(a)(i) of the EEZ Act).

189. The EPA report states that OMV’s IA focuses on the cumulative effects of drilling cuttings and

indicates that the distance between the Whio-1 drilling site and the existing Maari wellhead platform

(4.5 km), where they are currently drilling the Maari development wells, is a reason for cumulative

effects of cuttings deposition to be unlikely or unexpected.76

190. The IA does not assess the cumulative effects of drilling a second exploratory well if problems are

encountered in the first well. We agree with the EPA report that the worst-case scenario would result

in almost a doubling of the area affected by cuttings and drilling mud because OMV would offset the

rig by approximately 50 m to attempt to drill a new well.

191. We also agree with the EPA report that the impacts of a second well would still be low because the

seabed is not a sensitive environment and the benthic community is likely to be able to adapt and

recover within a reasonably short period of time (scientific evidence suggests this occurs within a

year).

192. The EPA report considers that the Whio-1 site is a greenfield drill site because the existing baseline

benthic environment has not been modified by previous activity. The EPA report considers that the

activities will not add to or exacerbate other effects from previous activities in the area.

193. We find that cumulative effects of discharges from the activities is ‘unlikely’ and that any effects of

such a well would be ‘minor’, resulting in a ‘very low’ risk. The requirement to undertake post-drill

monitoring will yield further information on the cumulative effects of exploration for subsequent

marine consents in the area.

194. The EPA report also notes that the IA does not consider cumulative effects of oil spills because they

are usually singular events that have a low risk of occurring. The EPA report considers that the risk

of multiple unplanned events is very low and that there have been few oil incidents in the history of

oil and gas exploration in the region. We agree with this.


46

9. Economic benefits to New Zealand

195. We are required to take into account the economic benefit to New Zealand of allowing the activity

(section 59(2)(f) of the EEZ Act).

196. We note that section 59(2)(f) is in relation to the benefits “to New Zealand”, and we take this to mean

national economic benefits. This means that local or regional benefits (even if they represent

transfers from other parts of the economy) cannot directly be considered under section 59(2)(f).

However, we consider that these local benefits are able to be considered under section 59(2)(m),

which allows us to consider “any other matter” that we consider relevant.

197. The IA presents a lengthy discussion on economic benefits.77 Most of the benefits that have been

described relate to the overall oil and gas programme in and around Taranaki. While nearly all of the

economic benefits of the oil and gas programme are realised during the development and production

stages, they do rely heavily on supporting exploration programmes such as the Whio-1 well, that is,

without exploration, there would be no production.

198. The economic benefit to New Zealand of allowing this application is limited to employment of local

companies and contractors. Therefore, we find the economic benefit to New Zealand of allowing the

application to be ‘negligible’ and the economic benefit to the local economy to be ‘minor’.

199. Although we find the immediate economic benefit of this application to be small, we also find that the

economic benefit to both the local and national economy could be much larger if this exploratory well

finds significant quantities of oil or gas that then lead to production.

77 IA section 5.

47

10. Marine management regimes

200. We must take into account the nature and effect of other marine management regimes (MMRs)

(section 59(2)(h) of the EEZ Act). Section 7 of the EEZ Act defines what a marine management

regime is. The four organisations operating MMRs, including their responsibilities, that are relevant

to this application are:

(a) DoC – marine mammals and protected species, including approval of MMIAs

(b) MNZ – emergency response plans, navigational safety and discharges, including approval of

DMPs. which incorporate an SCP, WCCP and EMP

(c) MPI – fisheries and biosecurity

(d) WorkSafe – workplace safety, including ‘accepting’78 Safety Cases and WAPs.

201. Both EPA staff and the DMC have requested information from all these organisations in order to

understand the nature and effect of their MMRs. The IA provides information on OMV’s requirements

under the relevant MMRs.79

202. We note that, while these MMRs may not specifically assess environmental risks and consequences

or controls that could avoid, remedy or mitigate environmental effects of the activities or unplanned

events, they all contain elements relating to the environmental matters that we must consider in our

decision-making.

203. As noted earlier, we have relied heavily on OMV complying with its legal requirements under these

MMRs in order to avoid, remedy and mitigate the potential environmental effects and risks.

204. Where compliance with the legal requirements under another MMR has an important environmental

element, we have included a condition requiring compliance with it – namely the DMP approved by

MNZ, the MMIA approved by DoC, the Safety Case accepted by WorkSafe and provision of a WAP.

205. As required by section 63(4) of the EEZ Act, we have not imposed any conditions that conflict with

measures required by any of these MMRs or the Health and Safety in Employment Act 1992.

78 Safety Cases are required under the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013 and do not get ‘approved’ per se. 79 IA section 4.7.

48

11. Efficient use and development of natural resources

206. We are required to take into account the efficient use and development of natural resources when

considering this application (section 59(2)(g) of the EEZ Act).

207. The EPA report notes that the IA does not provide sufficient information to determine whether the

activities represent an efficient use and development of natural resources,80 and the EPA presents

discussion on the costs and benefits of the activities.

208. The EPA report concludes that, on balance, the exploration activities are ‘likely’ to be an efficient use

and development of natural resources in the event a discovery is made because the benefits appear

to outweigh the costs. We concur with this assessment.


49

12. Best practice

209. We are required to take into account “best practice” when considering this application (section

59(2)(i) of the EEZ Act).

210. The EPA report does not confirm whether OMV’s activities are, in its opinion, best practice or not.

The EPA report states that OMV has used ‘good oilfield practice’ as its best-practice approach and

states that this concept appears to consist of a collection of undocumented practices, procedures

and methods, regulations and conventions that have evolved over the years from experience to

address issues and problems.81

211. OMV has provided further information on what ‘good oilfield practice’ means82 including a list of

international standards that may be employed during the drilling activities. OMV states its definition

of good oilfield practice is based on international industry standards and the International Association

of Oil & Gas Producers’ guidelines for good practice.

212. EPA staff have assessed the further information provided by OMV,83 but unfortunately they have not

provided any further confirmation or otherwise that OMV’s activities constitute industry or activity

best practice. However, the information provided by OMV, particularly the Safety Case accepted by

WorkSafe, gives us confidence to be able to reach a finding that the activities constitute industry best

practice.

81 EPA report paragraph 164. 82 OMV letter dated 1 August 2014. 83 Internal EPA memorandum from T Davies to R Johnson dated 6 August 2014.

50

13. Adaptive management

213. Our decision to grant this Marine Consent means that consideration of an adaptive management

approach is not required under section 61(3) of the EEZ Act.

51

14. Summary of findings

214. During the consideration of this application, we have been required to consider a large number of

matters for which we have made findings. The table below summarises our findings, including the

relevant consideration(s) of section 59 of the EEZ that the finding(s) relate to. We note here that not

all the subsections of section 59 are included because we are not required to make findings on them.

Summary of findings

Consideration EEZ Act section Finding(s)

Protection of

biological diversity

and integrity of marine

species, ecosystems

and processes

59(2)(a)

59(2)(b)

59(2)(d)

• Risk of adverse effects on benthic and planktonic

communities from the disturbance of the seabed

and sediment deposition onto the seabed are

‘medium’.

• Risk of adverse effects on marine mammals is

‘low’.

• Risk of adverse effects on seabirds is, at worst,

‘low’.

• Risk of adverse effects on marine species,

ecosystems and processes from unplanned events

is, at worst, ‘low’.

Protection of rare and

vulnerable

ecosystems and

habitats of threatened

species

59(2)(a)

59(2)(b)

59(2)(e)

• Risk of adverse effects on rare and vulnerable

ecosystems and habitats of threatened species is,

at worst, ‘low’, including from unplanned events.

Cumulative effects 59(2)(a)(i) • Risk of adverse effects as a result of cumulative

effects is ‘very low’.

Effects on existing

interests

59(2)(a)

59(2)(b)

• Risk of adverse effects on commercial fishing is

‘very low’.

• Risk of adverse effects on marine traffic is ‘low’.

• The effects on Māori interests from the planned

activities is low.

Effects beyond the

EEZ

59(2)(a)(ii)

59(2)(b)(ii)

• Risk of adverse effects outside the EEZ is ‘very

low’.

Effects on human

health

59(2)(c) • Risk of adverse effects on human health is ‘very

low’.

Economic benefits 59(2)(f) • Economic benefit of drilling a single exploratory

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Consideration EEZ Act section Finding(s)

59(2)(m) well to New Zealand is ‘negligible’ but would

contribute to the local economy to a ‘minor’ extent.

• If the exploratory well identifies commercial

quantities of oil and/or gas, the benefits to the local

and wider New Zealand economy would be

greater.

Efficient use and

development of

natural resources

59(2)(g) • Activities are considered to be an efficient use and

development of natural resources if the exploration

results in commercial quantities of oil and/or gas

being found.

Nature and effect of

other MMRs

59(2)(h) • A number of MMRs are relevant to the application

and include aspects that relate to environmental

effects.

Best practice 59(2)(i) • OMV has a Safety Case accepted by WorkSafe

that references best-practice international

standards and good oilfield practice. The DMC

finds that this constitutes industry best practice.

215. Further, because our consideration of this application has been in accordance with sections 59 to 61

of the EEZ Act and we have found that the risks to the environment are acceptable, we therefore

also find that the purpose of the EEZ Act will be achieved.

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15. Commentary on conditions

15.1. Introduction

216. Section 63 – Conditions of Marine Consents – of the EEZ Act states at subsection (1):

“The Environmental Protection Authority may grant a Marine Consent on any condition that it

considers appropriate to deal with adverse effects of the activity authorised by the consent on the

environment or existing interests.”

217. Also, section 59(2)(j) requires us to take into account:

“the extent to which imposing conditions under section 63 might avoid, remedy, or mitigate the

adverse effects of the activity.”

218. We accept we have wide discretion in terms of imposing conditions on this Marine Consent and have

carefully considered the conditions proposed by the applicant as well as those recommended by

EPA staff.

219. In reaching our conclusions on a set of ‘fit for purpose’ conditions, we have taken into account the

contextual setting discussed earlier in this decision (section 2.4.5) and the following principles for this

decision:

(a) That OMV will comply with key relevant MMRs.

(b) Reliance on the relevant agencies to manage primary compliance associated with their particular

MMR(s) and therefore we are not to impose conditions more appropriately in their immediate

domain.

(c) That OMV and their rig operator Frigstad are competent and experienced operators who will

meet their commitments expressed in the IA and in their responses to requests under section 42

of the EEZ.

(d) To avoid (where possible) imposing conditions that would require EPA approval before an

operational activity is started.

(e) Reliance on OMV undertaking the activities as specified in its IA and further information and then

only applying specific conditions where we felt the need to remove doubt or enhance

environmental protection.

(f) Requiring a small number of reporting requirements on the activities of greatest environmental

concern to achieve extra assurance that the activities were in fact undertaken as outlined in

OMV’s IA and further information.

15.2. Conditions of particular note

220. OMV applied for a three-year duration for the Marine Consent to cover the post-drill monitoring

required by MNZ. If applied from the date of this decision, a three-year duration would mean that the

Marine Consent would expire in August 2017. We note that the post-drill monitoring is programmed

54

to take place annually during the month of October, and having an August 2017 expiry date would

therefore mean that OMV would not be able to undertake its third and final monitoring round, should

this be required. For this reason, the DMC has imposed a condition84 that specifies that the Marine

Consent expires on 31 December 2017, which is a four-month extension to that sought by OMV.

This expiry date provides OMV some flexibility should there be delays in the third year of post-drill

monitoring.

221. We have imposed a condition85 that requires OMV to comply with its Safety Case, the approved

DMP and the approved MMIA – these being obligations under other MMRs but that we consider are

important from an environmental protection perspective – and therefore meets the tests of section

63(3) and (4) of the EEZ Act. In addition, this condition allows the EPA to ensure compliance from an

EEZ Act perspective should the EPA become concerned about some environmental exposure.

222. Many of the conditions recommended to us required OMV to keep records and provide them to the

EPA at various stages of the drilling operations. Given that the drilling has commenced, we consider

that, instead of providing records on an ongoing basis, a more optimum arrangement is for OMV to

prepare a comprehensive summary report at the completion of drilling operations. This requirement

appears as Condition 8 in section 17 of this decision.

223. Condition 10 in section 17 of this decision was recommended, in part, in the EPA report, but we have

added to the condition, requiring OMV to provide photographic evidence that all structures have

been removed from the seabed. This is to ensure that there are no residual navigational hazards at

the well site.

224. We note that the EPA report included a condition that would have ‘required’ OMV to undertake three

years of post-drill monitoring. We have not imposed this as a condition because the decision on how

many years monitoring is necessary (up to a maximum of three years) is currently the responsibility

of MNZ. If the monitoring shows that the impacted areas have recovered back to pre-drill conditions

in less than three years, no further sampling is necessary, so we do not consider it reasonable to

‘require’ three years of monitoring. For completeness, we record that the duration of the consent

enables three years of monitoring should it be necessary.

84 Condition 2 in section 17 of this decision. 85 Condition 4 in section 17 of this decision.

55

16. Decision

Pursuant to section 62(1)(a) of the Exclusive Economic Zone and Continental Shelf (Environmental Effects)

Act 2012, the Environmental Protection Authority hereby grants the application for a Marine Consent lodged

by OMV New Zealand Limited EEZ0200OMV, subject to the conditions specified in section 17 of this

decision, to continue its exploratory drilling operation at the Whio-1 exploration well within Petroleum

Exploration Permit (PEP) 51313 within the South Taranaki Bight.

Dated this 26th day of August 2014

_________________________ __________________________

David McMahon Tim Lusk

Chairman EPA Board Member

______________________

Kaye Thorn

Member

56

17. Conditions

Definitions

(a) All reference in this Marine Consent to ‘drilling operations’ means all drilling and associated activities

for the Whio-1 well (and any second well that may be drilled) from the time the Kan Tan IV is handed

over from the previous operator to the Consent Holder until the Kan Tan IV is handed over to the

next operator.

(b) All reference in this Marine Consent to the ‘EPA’, where it relates to providing information or notice,

means the Compliance Manager of the Environmental Protection Authority (in the first instance).

(c) All reference in this Marine Consent to the ‘approved Discharge Management Plan’ means the

Discharge Management Plan approved by Maritime New Zealand under the Maritime Transport Act

1994 and includes the Spill Contingency Plan, the Well Control Contingency Plan and the

Environmental Monitoring Programme.

This Marine Consent is granted subject to the following conditions:

General conditions

1. This Marine Consent shall be exercised in general accordance with the following:

(a) The application for Marine Consent dated 3 June 2014, including all supporting documents.

(b) The supplementary information provided on 16 June 2014.

(c) The further information provided on 27 July 2014.

(d) The further information provided in the letters dated 1 August 2014, 7 August 2014, 13 August 2014

and 15 August 2014.

Where there is any conflict between the application material (being item (a) above) or the later

information provided (being items (b) to (d) above), the later information shall prevail.

Notwithstanding the above, where there is any actual or apparent conflict between the information listed

in (a) to (d) above and any condition(s) of this consent, the conditions shall prevail.

2. This Marine Consent shall expire on 31 December 2017.

3. A copy of this Marine Consent and any variations to it shall be present at the Consent Holder’s office

and held on the Kan Tan IV at all times during the exercise of this Marine Consent whilst operating

within Petroleum Exploration Permit (PEP) 51313 and on any vessels associated with activities

authorised by this Marine Consent.

4. The Consent Holder shall comply with each of the following:

(a) The current Safety Case accepted by WorkSafe New Zealand in accordance with the Health and

Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013.

57

(b) The approved Discharge Management Plan.

(c) The Marine Mammal Impact Assessment approved by the Department of Conservation under the

Marine Mammals Protection Act 1978.

5. The Consent Holder shall ensure all personnel, including but not limited to those of joint venture

partners and contractors involved in the exploratory drilling and post-drilling monitoring authorised by

this Marine Consent, understand and comply with the requirements of this Marine Consent relevant to

their respective activities.

6. The Consent Holder shall ensure that at least one senior employee or suitably qualified or experienced

contractor is formally allocated responsibility for compliance management, collating information and

reporting in accordance with the requirements of this Marine Consent. The name and contact details of

this person(s) shall be provided to the EPA within five working days of commencement of this Marine

Consent and updated within five working days of any change in personnel.

Drilling operations and discharges

7. The Consent Holder shall notify the EPA in writing at least 24 hours before spudding if a second well is

to be drilled. Any such well shall be located within a distance of the first well such that the anchors of the

Kan Tan IV do not need to be repositioned.

8. The Consent Holder shall provide a written summary report of the drilling operations (which includes

any second well that may be drilled) to the EPA within three months of the completion of the drilling

operations. The report shall include, but not necessarily be limited to, the following:

(a) A record of the chemical composition, including the oil in water concentrations, and total volume of

the water-based muds discharged to sea.

(b) The total volume of cuttings discharged to sea.

(c) The total volumes of surplus cement and slurry discharged to sea and the location of the

discharge(s).

(d) A record of the total volume of water-based muds taken on shore for disposal.

(e) A record of any marine mammal and/or seabird impacts, strikes or entanglements resulting in

deaths or injury occurring as a result of the drilling operations.

(f) A record of any incidents or non-compliance with the approved Discharge Management Plan

(including how those non-compliances and incidents were resolved), including hydrocarbon or

hazardous substance spill occurrences.

(g) A record of incidents of loss of well control that had the potential to result in a hydrocarbon or

hazardous substance spill event.

(h) A brief discussion of the overall drilling process, including why a second well was needed (if

relevant) and the problems encountered with the first well, the reasons for its abandonment and the

geographical location of the well(s) drilled under this Marine Consent.

58

Well abandonment and withdrawal of the Kan Tan IV

9. The Consent Holder shall provide a copy of the final Well Abandonment Plan to the EPA within three

months of the completion of the drilling operations, which shall include the relevant as-built plans for the

well(s) drilled under this Marine Consent.

10. The Consent Holder shall ensure that no structures, equipment or devices are left on the seabed that

may form a navigational hazard or snag hazard to fishing nets or lines. Any such structures, equipment

or devices used during the exercise of this Marine Consent shall be removed and photographic evidence

that all such structures have been removed provided to the EPA within three months of the completion of

the drilling operations.

Post-drill benthic monitoring

11. The Consent Holder shall implement the Environmental Monitoring Programme identified in the

approved Discharge Management Plan.

12. The results of the Environmental Monitoring Programme required by Condition 11 shall be provided to

the EPA no later than 31 December each year for the duration of the programme.

APPENDIX 1 PROCEDURAL HISTORY

Timeline for application

3 June 2014 Application for Marine Consent lodged with the EPA by OMV

17 June 2014 EPA completeness of application check completed

24 June 2014 EPA commission the EPA report

9 July 2014 EPA served copies of the OMV application on persons required by section 44A of

the EEZ Act

4 July 2014 EPA appoints DMC including delegating decision-making powers to it

10 July 2014 Letter sent to OMV requesting further information (EPA staff request)

10 July 2014 DMC induction meeting

17 July 2014 EPA staff request further information from DoC, MNZ, WorkSafe and MPI

21 July 2014 DMC meeting to discuss decision-making process and initial assessment of

application – DMC resolves that further information is required from OMV

25 July 2014 MNZ response received to EPA staff request for information

29 July 2014 Letter sent to OMV requesting further information (DMC request #1)

30 July 2014 Letter sent to NKTT requesting a report on the OMV application (DMC request)

30 July 2014 MPI response received to EPA staff request for information

1 August 2014 Letter sent to MNZ and WorkSafe requesting further information (DMC request)

1 August 2014 OMV response received to EPA staff request for information

1 August 2014 DoC response received to EPA staff request for information

5 August 2014 DMC meeting to assess adequacy of information

7 August 2014 Letter sent to OMV requesting further information (DMC request #2)

8 August 2014 EPA report provided to the DMC

12–13 August 2014 DMC deliberation meeting

13 August 2014 OMV response received to DMC request #2

13 August 2014 Draft conditions sent to OMV for comment

15 August 2014 OMV final response received to DMC request #1

18 August 2014 Report from NKTT provided to the DMC

21 August 2014 DMC deliberation meeting

26 August 2014 Decision date

Requests for further information

Date of request Requested from

Requested by

Section of EEZ Act

Date information received

Nature of request

10 July 2014 OMV EPA staff 42 1 August 2014 General request (20 questions) covering a wide range of matters.

17 July 2014 DoC EPA staff 44 1 August 2014 Confirmation of: 1) MMIA approval; 2) areas of conservation value; 3) consultation. Comment invited on conditions and any additional information.

17 July 2014 MPI EPA staff 44 30 July 2014 Confirmation of FMA area; biosecurity risks; opinion on conditions; any additional information.

17 July 2014 MNZ EPA staff 44 25 July 2014 Process for informing others of activity; confirmation of approval of DMP; opinion on conditions; previous oil spill involving OMV; any additional information.

17 July 2014 WorkSafe EPA staff 44 No response Confirmation that Safety Case has been approved; opinion on conditions; any additional information.

29 July 2014 OMV DMC 42 15 August 2014 Request for Safety Case; MMIA; draft WAP; pre-drill survey report; revised risk assessment; OMV drilling record; insurance details; quality assurance questions.

30 July 2014 NKTT DMC 44 18 August 2014 Report on application as provided for by section 18 of the EEZ Act.

7 August 2014 OMV DMC 42 13 August 2013 Clarification on whether: 1) discharges of cement and cement slurry discharges are being applied for; 2) the second well (if needed) forms part of the application. Confirmation of spudding date.

11 August 2014 WorkSafe DMC 44 No response Request for Safety Case and previous interactions between WorkSafe and OMV.

11 August 2014 MNZ DMC 44 No response Compliance information and confirmation of insurance.

13 August 2014 OMV DMC 42 19 August 2014 Invitation for OMV to comment on draft conditions.

APPENDIX 2 OBSERVATIONS FROM THE DMC Introduction This is the first decision issued by the EPA for a non-notified discretionary activity under the EEZ Act, and as

such, the DMC has needed to feel its way somewhat in its consideration of this application. During the

course of considering this application, the DMC has noted a number of matters and concerns that it wishes

to record outside the formal part of the decision. We have referred to these comments as ‘observations’, and

they should solely be regarded as such.

The DMC hopes that these observations are helpful to both the EPA staff as well as future applicants for

such consents so that the future processing of these applications can be more streamlined and efficient. We

are mindful that these observations are not binding on OMV. For the avoidance of doubt, these observations

do not form part of our evaluation and decision.

Adequacy of application The DMC had concerns about the adequacy of information that was available at the time of its appointment

despite the fact that the application had been through the EPA completeness check before being formally

accepted. There are inadequacies in this process in that the check is inherently a ‘tick-box’ exercise, with no

thought given to the level of information that might be required to consider and decide the application,

resulting in a large number of requests for further information from both the applicant and other agencies.

This raises timing issues, because when the completeness check is approved, the statutory clock starts,

putting considerable pressure on all those parties required to prepare reports (EPA staff and NKTT), provide

information (the applicant and government agencies) and us as the DMC to make a decision. This has the

potential to ultimately impact decision-making through the ‘best available information’ test and increases the

risk of a rushed decision being issued.

The DMC recommends that applicants should, as part of lodging a ‘complete’ application, provide evidence

of other authorisations and approvals if these are relevant to the Marine Application and referred to or

discussed in the IA. For example, in this instance, the IA stated that DoC had approved the MMIA and that it

had the required insurance, but it did not initially provide the proof of these documents. The DMC wanted

reassurance that these documents existed, and supplying these with the application would have been

preferable. We also had to request further information about the relevant approvals for the applicant’s

activities under the MMRs.

One of the key documents required under another MMR was the DMP, and although we requested a copy of

this from both the applicant and MNZ, we were only given parts of it. Again, such key documents should, in

our view, be a mandatory requirement for all such applications to be provided at the front end.

62

We recommend that applicants be required to include evidence of other relevant approvals and also key documents such as DMPs with their applications and that, in the absence of such key documents, the EPA does not accept such applications as being ‘complete’ when it undertakes its completeness check.

Confidentially was an issue that the applicant raised and was one that resulted in it withholding information

that would have been relevant and useful to the DMC in making a decision. In this case, the issue of

confidentiality appeared to be the reason why the DMC was not able to view the entire DMP.

We recommend that the EPA works with the oil and gas industry to agree protocols for managing confidential or sensitive information.

Requests under sections 42 and 44 of the EEZ Act We were very conscious that the requests for further information by both the EPA staff and the DMC created

considerable work for the applicant and other agencies. As we developed our processes and began to focus

on the most important issues (including the context of the application itself), we were able to better identify

key questions we needed answers to, which we called ‘essential information’. Against tight timeframes, there

is a tendency to ask more questions early to ensure we get a reply in time rather than wait and ask a much

smaller number of truly relevant more accurately framed questions in a manner most likely to get a valuable

reply. Our learning from this is to consider each request that is made in terms of its necessity, relevance and

impact on the overall decision.

We recommend that future DMCs be appraised of the importance of considering each request carefully and ensuring precise requests to maximise the value to the decision-making process.

Environmental Management Plan The application that was in front of us relied on a range of documents prepared under a range of MMRs (e.g.

the DMP). Many of those documents are produced to fulfil other legislative requirements, and many of these

documents include environmental considerations that are pertinent to the EEZ Act. We feel that it would be

extremely useful for future applicants for exploratory well-drilling activities to prepare and provide an activity-

specific Environmental Management Plan (EMP) that covers all the relevant environmental matters within the

jurisdiction of the EEZ and is specifically tailored to the activity being applied for. For the current application,

we had to ‘cherry-pick’ parts of documents under other MMRs, and in our view, it would be far more efficient

for applicants to collate all the relevant environmental management considerations into a single EMP

document that could then form the basis of the application and conditions.

63

Further, a central concern with this application was the risk of unplanned events and the need to be assured

that the applicant would indeed do what it said it was going to do in its IA to mitigate those risks. This

information could have been included within an EMP. Hence, the EMP would act as an umbrella document,

detailing the functional links and relationships between all relevant documents.

We recommend that future applications prepare and include an Environmental Management Plan in applications for Marine Consents tailored to the requirements of the EEZ Act for which the consent is being sought.

Liability for abandoned wells One of the issues that the DMC struggled with was the duration of the Marine Consent and, in particular,

who took responsibility for the potential liability of the abandoned well at the conclusion of the consent

period. Given that the consent does not authorise any occupation, the long-term status of the well is

unknown. This is a legislative matter that may need to be addressed in the future under the EEZ Act or some

other legislation.

We recommend that the question of ongoing liability for abandoned wells may need to be addressed in the future.

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