Request for information about exploration permits awarded to Anadarko Petroleum

Commercial
Confidentiality
Legislation:
Official Information Act 1982
Section 9
Legislation display text:
Official Information Act 1982, ss 9(2)(b)(ii), 9(2)(ba)(i), 9(2)(ba)(ii)
Agency:
Ministry of Business, Innovation and Employment
Ombudsman:
Dame Beverley Wakem
Case number(s):
350528
Issue date:
Language:
English

Application and evaluation subject to obligation of confidence—release would make bidders reluctant to share full information in future, which would undermine MBIE’s ability to carry out statutory functions—release would also reduce the appeal of investing in New Zealand and MBIE’s ability to administer the Crown Minerals Act, which would otherwise damage the public interest—sections 9(2)(ba)(i) and (ii) apply—revealing information about particular prospects or reserves would disadvantage third party vis-à-vis their competitors—revealing information about projected costs would disadvantage third party in its negotiations with service companies—section 9(2)(b)(ii) applies—public interest met by available information

The New Zealand Government allocates petroleum exploration permits in an annual tender called a ‘Block Offer’. The tender process is run by New Zealand Petroleum and Minerals (part of the Ministry of Business, Innovation & Employment—MBIE).

After participating in the 2012 Block Offer, Anadarko Petroleum was awarded two petroleum exploration permits. A requester sought all information held about Anadarko’s application. MBIE refused the request under a number of grounds including sections 9(2)(ba)(i) and (ii) (confidentiality) and 9(2)(b)(ii) (unreasonable commercial prejudice), and the requester complained to the Ombudsman.

The information at issue comprised Anadarko’s application and the assessment panel’s evaluation of that application. It included:

  • seismic data used to assess the chances of a commercial accumulation of petroleum being present;

  • information reflecting Anadarko’s exploration strategy; and

  • financial information, including projected costs for particular operations.

MBIE explained that, in the context of a competitive tender process, companies are expected to submit detailed and accurate bids, which include a large amount of confidential and commercially sensitive financial and geotechnical information. MBIE considered that if the information were to be released, current permit holders and potential bidders would not be willing to provide as much confidential or sensitive information as they currently did. Consequently, MBIE’s ability to obtain relevant information and a holistic view of a bidder would be compromised, hindering its ability to allocate mineral rights in accordance with the purpose of the Crown Minerals Act 1991.

The Chief Ombudsman accepted that section 9(2)(b)(ii) of the OIA applied. The information clearly related to Anadarko’s commercial position. The Block Offer bidders were all commercial entities, operating in a highly competitive market. Disclosure of information about the locations of particular prospects or reserves would be highly valuable to Anadarko’s competitors, including other permit holders and prospective applicants. Disclosure of information about projected costs would undermine their negotiations with service companies. Release would unreasonably prejudice the ability of Anadarko to compete in the market.

The Chief Ombudsman also accepted that section 9(2)(ba)(i) and (ii) of the OIA applied. The Invitation for Bids (IFB) stated:

NZP&M will treat information contained in a bid as confidential and will not disclose the information unless it is required to disclose the information under the Official Information Act 1982 or is otherwise required by law to do so or where the information is already in the public domain. NZP&M will notify any bidder before any information is released in accordance with that Act.

The IFB did not expressly state that information relating to the evaluation of applications would be confidential. However, the evaluation information referred to, interpreted, and commented on, information contained in the applications. In the Chief Ombudsman’s view, this carried an implied obligation of confidence.

The Chief Ombudsman found that MBIE’s concern regarding the willingness of current permit holders and prospective bidders to provide it with confidential and commercially sensitive information was valid. If the information at issue was to enter the public domain, current permit holders and prospective bidders would be more circumspect when supplying information to MBIE, for fear of disclosure to third parties. This would be likely to have an adverse effect on the supply of similar information, or information from the same source.

The Chief Ombudsman was satisfied that MBIE was reliant on the continued supply of such information in order to carry out its statutory functions and implement policy, including the awarding of mineral exploration permits, and that the continued supply of such information must be regarded as being in the public interest.

The Chief Ombudsman also accepted that the release of commercially sensitive information would reduce the appeal of investing in New Zealand, and the ability of MBIE to administer the Crown Minerals Act 1991 in accordance with its purpose. This would ‘otherwise damage the public interest’, in terms of section 9(2)(ba)(ii) of the OIA.

Having found that sections 9(2)(ba)(i)/(ii) and 9(2)(b)(ii) applied, the Chief Ombudsman considered the countervailing public interest in disclosure. The Ministry argued that the public interest was in disclosure of information about the environmental impact of petroleum exploration, but the Chief Ombudsman did not agree that the public interest was limited in this way. There was also a public interest in ‘having sufficient information about the Block Offer process, including the process by which bids are evaluated’, to promote transparency and the accountability of public officials. However, the Chief Ombudsman was persuaded that this interest was substantially met by information already in the public domain, including information contained in the IFB, which set out in some detail the information required by the Ministry and how the bids were evaluated. 

The Chief Ombudsman concluded there was good reason to withhold Anadarko’s application and the evaluation of that application.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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