Decommissioning of petroleum infrastructure and wells
Petroleum exploration and mining permit and licence holders must carry out decommissioning activities and meet the full financial cost of those activities.
Decommissioning is the process of safely retiring petroleum infrastructure and wells. This includes:
- plugging and abandoning wells
- removing equipment and facilities
- restoring the site to a safe and stable condition.
These activities can be complex and costly, which is why strong rules are needed to ensure they’re carried out responsibly.
As part of New Zealand’s commitment to responsible resource management, new rules are now in place for how petroleum wells and infrastructure are decommissioned at the end of their operational life. These changes bring New Zealand’s approach in line with international standards, ensuring our petroleum sector remains safe, responsible, and future-focused.
Changes to the decommissioning regime
The Crown Minerals Amendment Act 2025 (CMAA 25) builds on earlier reforms introduced in 2021, creating a robust decommissioning regime that protects landowners, the Crown, and taxpayers.
Crown Minerals Act 1991 — New Zealand Legislation
Financial securities
All permit holders must continue to provide financial security to cover decommissioning costs. The Minister retains discretion over the amount and type of security. Changes through CMAA 25 provide more flexibility in how these financial securities are held in a way that is cost efficient and best suits a permit holder’s circumstances.
Trailing liability
To ensure accountability, the Minister for Resources and Minister of Finance can now require outgoing permit holders (or related parties) to guarantee decommissioning costs — especially if the new permit holder cannot provide adequate security.
The Ministers have discretion whether to require an outgoing guarantee when approving a permit transfer or change of control of participants. The changes also apply to licences under the Petroleum Act 1937.
Exemptions and deferrals from decommissioning obligations
The change clarifies that exemptions and deferrals from decommissioning obligations can be granted for the whole or part of particular items of petroleum infrastructure. This ensures that financial securities can be set based on practical and reasonable decommissioning requirements without changing environmental obligations.
Post-decommissioning liability
Even after decommissioning is complete, permit holders remain responsible for any future issues — such as problems with plugged wells or infrastructure left in place. While they no longer need to provide financial security for uncertain future risks, they are still liable in perpetuity for any issues after decommissioning.
Crown Minerals Act 1991 — New Zealand Legislation