Maori claim stalls New Zealand’s sale of Kupe stake

The government plans to sell its Kupe gas stake are threatened by a multi-million dollar Maori claim on New Zealand's petroleum resources. The long-awaited claim came after the government announced its intention to sell its 11 % Kupe stake to state-owned generator Genesis Power last month.
Challenging government opinion in a letter to Associate Energy Minister Harry Duynhoven, the tribunal maintains Maori do have a claim on the country's oil and gas reserves. "It is also our clear view that in many instances where the Maori property right in petroleum was extinguished, it was extinguished in a manner inconsistent with the principles of the Treaty," wrote chief judge Joseph Williams. The crown must address these issues before it sells Kupe, he said.

The original claim was lodged by Taranaki's Nga Ruahine in mid 2000 when the government explored selling its Kupe stake. East coast Iwi Ngati Kahungunu joined the claim before the tribunal's hearing in October 2000. Several other Iwi supported theclaim though didn't formally join the hearing.
All are still awaiting the outcome, now being sped through because of the government's decision to sell Kupe. Representing Ngati Kahungunu, Auckland lawyer Grant Powell said the claim was important for all Iwi. "The crown has to date not dealt with natural resource issues, including petroleum, in any sensible or comprehensive way and ultimately in terms of petroleum, though Taranaki has been the area most fruitful for New Zealand, there are a number of other areas particularly off the east coast that could also be fruitful in the future. So it's important to sort out these issues now before it becomes a problem later on."

Powell was unwilling to put a figure on the claim or speculate what it could be worth, though acknowledged Iwi were talking multi-millions. If the claim is successful, all Iwi with outstanding claims could assert landlord rights and royalties for oil and gas finds on their land.
"It's almost about potential returns rather than actual returns," said Powell. "The number you're talking about is the size of New Zealand's oil industry. But there's a lot of money spent getting it out so it's difficult (to quantify)."

The claim relates back to the 1937 Petroleum Act which nationalised the country's oil and gas reserves. All royalties received by the crown to date, for example, from the main gas field Maui, could be affected. But what the crown might have earned from Maui, after costs were stripped out, was not clear, said Powell.
In a paper presented to the tribunal at the October 2000 hearing, gross petroleum revenue from 1970, when Maui kicked in, to 1999 topped $ 12.86 bn. The government's take from this was estimated at $ 5.91 bn. "And that's before it has been adjusted for inflation -- so billions of dollars are involved," said one source.
Mike Patrick, executive director of the country's Petroleum Exploration Association, said with Maui due to run out by 2007 and the electricity industry clamouring for more fuel the last thing the country needed was anything that would dissuade the industry from further exploration. Though the matter was between Maori and the crown, if an additional royalty was imposed on the industry that would kill the attraction of exploration, he said.

In the past the government has maintained that minerals and petroleum are a national asset and not subject to treaty claims. Before the October 2000 hearing, the then associate energy minister Paul Swain was scolded by Maori supporters for saying that neither the tribunal nor the courts would change government policy on this issue whatever they said. The government has an obligation to consider tribunal findings but it doesn't have to abide by them.
Reiterating the government's past stance, Duynhoven refused to comment until he had seen the tribunal's report. The Kupe sale "is by no means a fait accompli at this point," he said, and if the tribunal's report refers to the sale it will be taken into consideration.