Under Australian law, rights to petroleum are owned or held by governments but assigned to private interests under arrangements set out in legislation.
Australian governments neither undertake petroleum projects nor engage in commercial petroleum exploration or development. The private sector initiates exploration and development; the government's roles in relation to the petroleum sector are to:
- establish the macroeconomic environment (broad economic policy);
- provide a regulatory framework for exploration, development, safety, environmental assessment and revenue collection;
- reduce commercial risk in petroleum exploration by collecting and disseminating geoscientific information; and
- investigate ways to remove impediments to industry competitiveness.
In the Australian federal system, both the national government (the Australian Government) and the State and Territory governments have important roles affecting petroleum exploration and development:
- the Australian Government is responsible for broad economic policy and international matters, including personal and company income tax, interest rates, the overall level of government spending, foreign investment guidelines, trade and customs, commercial corporations and international agreements;
- beyond the coastal waters (seaward of the first three nautical miles of the territorial sea) to the outer limits of Australia's continental shelf, petroleum rights are held by the Australian Government, but day-to-day administration is carried out jointly with the relevant adjacent State or Territory; and
- onshore and in coastal waters (effectively the first three nautical miles from the coastline), the States and Territories own and allocate petroleum rights, administer petroleum operations, including occupational health and safety, and collect royalties on petroleum produced.
Because of their shared interest in the contribution of the petroleum sector to national economic wellbeing, the Australian and State and Territory governments hold regular formal consultations, through the Ministerial Council on Mineral and Petroleum Resources. They do this with a view to ensuring coordination of policy and regulatory requirements in a wide range of areas, as described later in the next section.
Petroleum exploration and development in the Timor Sea Joint Petroleum Development Area (JPDA) is governed by a Treaty which came into force on 2 April 2003 (further details are available in the "Timor Sea Joint Petroleum Development Area" chapter of this publication). Acreage in the JPDA is managed by the Designated Authority, within the Timor-Leste National Petroleum Authority, and conditions vary from the administrative arrangements described elsewhere in this publication.