Greenpeace and an East Coast iwi could face a hefty legal bill after their application for a judicial review into the awarding of major oil exploration permits was rejected.

Earlier this month Greenpeace and East Coast iwi Te Whanau-a-Apanui had applied for a judicial review of the decision by the Government to award large oil exploration permits in the Raukumara Basin.

The application claimed that then Energy Minister Gerry Brownlee wrongly believed he should not take environmental concerns into consideration for applications outside New Zealand's territorial limit but within the Exclusive Economic Zone.

But in a decision released yesterday, Justice Warwick Gendall rejected the application, finding that there was "no reviewable error of law on the part of the minister in making his decision to grant Petrobras the permit".

Justice Gendall said the length of time taken to launch legal action might have meant he would have refused the application even if there had been an error.

The decision said the legal bill of both the minister and Petrobras should be covered by the applicants.

Greenpeace spokeswoman Vanessa Atkinson said in a statement that the organisation was considering whether to appeal the decision, claiming it had good grounds to do so.

"The fact remains, however, that exploratory deep sea oil drilling comes with the risk of catastrophic failure, as we saw in the Gulf of Mexico in 2010," she said.

Te Whanau-a-Apanui tribal leader Rikirangi Gage said proposed legislation on managing EEZ, currently going through Parliament, created questions over the awarding of the Petrobras permit.

"If there's nothing wrong with the process behind the granting of permits so far, then why was this bill created?"

- © Fairfax NZ News