The legal framework within which petroleum exploration and development activity takes place in Australia is a result of certain agreements and the division of responsibilities between the Australian Government and the State/Northern Territory (NT) Governments under the Australian Constitution.
Offshore petroleum operations beyond coastal waters are governed by Commonwealth legislation known as the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGSA). Within this legal framework, the Australian Government and the States/NT jointly administer and supervise industry activities through a Joint Authority arrangement. Each Joint Authority comprises the Australian Government Minister and the relevant State/NT Minister. In addition, the OPGGSA makes the relevant State/NT Minister responsible for most day-to-day administration.
The legislation provides for orderly exploration for and development of petroleum resources, and sets out a basic framework of rights, entitlements and responsibilities of governments and industry.
The key matters covered in the legislation are:
- issue of invitations to apply for exploration permits;
- issue of permits to successful applicants, and determination of conditions of the title;
- granting of retention leases over discoveries that are not currently commercial but are expected to become commercial within 15 years;
- granting of production and pipeline licences;
- granting of infrastructure licences for various processing activities;
- renewal of titles (where appropriate); and
- approval of applications for the registration of legal transactions, including farmins and transfers of titles, preparation and issue of special prospecting authorities, access authorities, consents for scientific investigations, variations of title conditions, exemption from title commitments, cancellation of titles for non-compliance with the conditions of the title.
Exploration permits are issued under a work program bidding system.
Except for environmentally sensitive areas (such as the Great Barrier Reef Marine Park), petroleum operations are permitted on most parts of the continental shelf. Operations must comply with the requirements and standards set by law, and factors such as navigation, defence, fisheries and environment are carefully considered, particularly where petroleum production is proposed. Each petroleum operation is submitted for the relevant Designated Authority's approval, in consultation with Commonwealth agencies.
Additional information on matters coming within the Australian Government's responsibilities for offshore exploration and development is set out in:
- the OPGGSA ('the Act'), the associated Explanatory Memoranda and Second Reading Speeches;
- the Regulations issued under the Act (notably in relation to management of the environment, data management, safety, pipelines and diving);
- a Schedule of Directions issued under the Act - "Specific Requirements as to Offshore Petroleum Exploration and Production";
- the Offshore Petroleum (Annual Fees) Act 2006 and Regulations;
- the Offshore Petroleum (Registration Fees) Act 2006 and Regulations;
- the Petroleum Resource Rent Tax Act 1987 and company taxation legislation; and
- any Guidelines issued to assist with the administration of the legislation.
Most of these documents can be viewed on the website: www.ret.gov.au/resources/upstream_petroleum/
Before the OPGGSA came into effect in 2008, the Petroleum (Submerged Lands) Act 1967 (PSLA) and associated Acts governed petroleum activities in offshore areas. The PSLA was rewritten to simplify the presentation of the legislation after more than 40 years of operation and amendments. The intention of the OPGGSA, which was proclaimed on 1 July 2008, is to improve user friendliness and reduce compliance and administrative costs, without making any major policy changes or changes to the current management regime.
Additional information in relation to offshore petroleum Legislation and Regulations is available on the following website: www.ret.gov.au/resources/upstream_petroleum/
For further information contact:
Offshore Resources Branch
Department of Resources, Energy and Tourism
GPO BOX 1564
CANBERRA ACT 2601
Telephone: +61 2 6213 7928
Facsimile: +61 2 6213 7970
In Australia's onshore areas and within coastal waters, petroleum operations are governed by the legislation of States and Territories. A two-stage system of exploration permit and production licence has generally been adopted. However, the minimum area, initial term of the permits, and charges and royalties levied vary from State to State.
Further information on matters in areas of State/NT responsibilities can be obtained from the relevant State or NT Mines Department - see Appendix B.
The Australian Government has reviewed all Regulations in effect under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in order to reduce overlap and duplication in the current regulations and to streamline reporting requirements for the petroleum industry. The Government has now commenced implementation of amended Regulations with this process to be completed by the end of 2009.