Petroleum and Geothermal Energy Act 2000 (South Australia P&GE Act)

Jurisdiction(s)
Instrument Date
Effective Date
Instrument Type
Primary
Relevant Regulatory Authority
South Australian Minister for Mineral Resources and Energy
Purpose and Context
Section 3 of the South Australia P&GE Act states that the objects of the Act are: (a)      to create an effective, efficient and flexible regulatory system for the industries involving exploration for, and the recovery or commercial utilisation of, petroleum and other resources (including geothermal resources and natural reservoirs suitable for storage or production purposes) to which this Act applies; and (b)      to encourage and maintain an appropriate level of competition in exploration for and production of petroleum and other resources to which this Act applies; and (c)      to create an effective, efficient and flexible regulatory system for the construction and operation of transmission pipelines for transporting petroleum and other substances to which this Act applies; and (d)      to minimise environmental damage from the activities involved in— (i)       exploration for, or the recovery or commercial utilisation of, petroleum and other resources to which this Act applies; and (ii)      the construction or operation of transmission pipelines for transporting petroleum and other substances to which this Act applies; and (e)      to establish appropriate consultative processes involving people directly affected by regulated activities and the public generally; and (f)       to ensure as far as reasonably practicable security of supply for users of natural gas; and (g)      to protect the public from risks inherent in regulated activities.
Relevant links
Instrument Access Date
22 August 2013
I. Regulatory scope and definitions
Definitions

Article/Section No.

Section 4
Section 10

Instrument Text

Part 1 - Preliminary

Division 3 - Interpretation

Interpretation

4

(1) In this Act, unless the contrary intention appears—

 

Adelaide Dolphin Sanctuary has the same meaning as in the Adelaide Dolphin Sanctuary Act 2005;

 

administrative penalty—See section 136;

 

approved form means a form approved by the Minister;

 

associated facilities—See section 56(2);

 

authorised activity means a regulated activity authorised by a licence;

 

authorised officer means a person authorized in writing by the Minister to exercise the powers of an authorised officer under this Act;

 

business day means any day except a Saturday, Sunday or public holiday;

 

competitive tender region means a part of the State designated as a competitive tender region under section 16;

 

contravention includes non-compliance;

 

department means the department of the Public Service assigned to assist the Minister in the administration of this Act;

 

discretionary condition of a licence means a condition that is imposed at the discretion of the Minister under this Act;

 

easement includes the statutory easement under the Natural Gas Authority Act 1967;

 

environment includes

 

(a) land, air, water (including both surface and underground water), organisms and ecosystems; and

 

(b) buildings, structures and cultural artefacts; and

 

(c) productive capacity or potential; and

 

(d) the external manifestations of social and economic life; and

 

(e) the amenity values of an area;

 

ERD Court means the Environment, Resources and Development Court;

 

former licensee includes a person who held a licence under the repealed Act;

 

geothermal energy means thermal energy contained in subsurface rock or other subterranean substances which is extracted or released by a means other than as part of the production of a naturally occurring underground accumulation of a substance;

 

GST means the tax payable under the GST law;

 

GST component means a component attributable to a liability to GST;

 

GST law means—

 

(a) A New Tax System (Goods and Services Tax) Act 1999 (Cwth); and

 

(b) the related legislation of the Commonwealth dealing with the imposition of a tax on the supply of goods and services;

 

joint venture includes a partnership;

 

land includes an estate or interest in land or right in respect of land;

 

licence means—

 

(a) a speculative survey licence; or

 

(b) an exploration licence (in any of its 3 categories—see section 21); or

 

(c) a retention licence (in any of its 3 categories—see section 28); or

 

(d) a production licence (in any of its 3 categories—see section 34); or

 

(e) a preliminary survey licence; or

 

(f) a pipeline licence; or

 

(g) an associated activities licence; or

 

(h) a special facilities licence;

 

mandatory condition of a licence means a condition that must be imposed under a provision of this Act;

 

marine park has the same meaning as in the Marine Parks Act 2007;

 

Murray-Darling Basin has the same meaning as in the Murray-Darling Basin Act 1993;

 

natural gas means petroleum that is, or would be, gaseous, at Standard Temperature and Pressure;

 

natural reservoir means a part of a geological structure (including one that has been artificially modified)—

 

(a) in which petroleum or some other regulated substance has accumulated; or

 

(b) which is suitable for the storage of petroleum or some other regulated

substance;

 

owner of land means each of the following (insofar as may be relevant in the circumstances of the particular case):

 

(a) a person who holds an estate in fee simple in the land;

 

(b) a person who holds a lease or licence over the land issued by the Crown;

 

(c) a person who is in possession of the land under a lease registered in the Lands Titles Registration Office or deposited in the General Registry Office and noted against the land;

 

(d) a person who has, by statute, the care, control or management of the land;

 

(e) a person who holds a tenement over or in relation to the land (including in relation to a stratum of the land), other than a speculative survey licence or a preliminary survey licence;

 

(f) without limiting a preceding paragraph, a person in actual possession of the land under a right of exclusive possession;

 

(g) a person who—

 

(i) holds native title in the land; or

 

(ii) is the registered representative of claimants to native title within the meaning of the Native Title (South Australia) Act 1994,

 

(with these subparagraphs being in the alternative);

 

(h) a person of a class brought within the ambit of this definition by the regulations;

 

petroleum means a naturally occurring substance consisting of a hydrocarbon or mixture of hydrocarbons in gaseous, liquid or solid state but does not include coal or shale unless occurring in circumstances in which the use of techniques for coal seam methane production or in situ gasification would be appropriate or unless constituting a product of coal gasification (whether produced below or above the ground) for the purposes of the production of synthetic petroleum;

 

pipeline means a pipe or system of pipes for conveying petroleum or another regulated substance from place to place and includes—

 

(a) tanks, machinery and equipment necessary for, or associated with, its operation;

 

(b) a part of a pipeline;

 

pipeline land means an interest in land (including an easement) acquired for the construction, maintenance or operation of a transmission pipeline;

 

private land means land alienated from the Crown by the grant of an estate in fee simple or a possessory interest conferring a right to exclusive possession of the land;

 

produce

 

(a) a person produces petroleum or another regulated substance if the petroleum or other substance is recovered or released from a natural reservoir in which it has been contained in the course, or as a result, of operations carried out by that person (and production is taken to occur when it reaches ground level);

 

(b) a person produces a regulated resource (other than a regulated substance)—

 

(i) in the case of geothermal energy—by releasing the energy for an industrial or commercial purpose;

 

(ii) in the case of a natural reservoir—by using it for the storage of petroleum or another regulated substance;

 

prospectivity of an area means its potential for the discovery of petroleum or other regulated resources;

 

public land means any land that is not private land;

 

record includes—

 

(a) a record in the form of a book or document, or in the form of a map;

 

(b) a record in the form of electronic data;

 

(c) geological samples;

 

(d) samples of—

 

(i) petroleum; or

 

(ii) another regulated substance; or

 

(iii) water;

 

regulated activity—See section 10;

 

regulated resource means—

 

(a) a naturally occurring underground accumulation of a regulated substance; or

 

(b) a source of geothermal energy; or

 

(c) a natural reservoir;

 

regulated substance means—

 

(a) petroleum; or

 

(b) hydrogen sulphide; or

 

(c) nitrogen; or

 

(d) helium; or

 

(e) carbon dioxide; or

 

(ea) any other substance that naturally occurs in association with petroleum; or

 

(f) any substance declared by regulation to be a substance to which this Act applies;

 

relevant Act means—

 

(a) in relation to the Adelaide Dolphin Sanctuary—the Adelaide Dolphin Sanctuary Act 2005; or

 

(b) in relation to a marine park—the Marine Parks Act 2007; or

 

(c) in relation to a River Murray Protection Area or the Murray-Darling Basin—the River Murray Act 2003;

 

relevant court means—

 

(a) where the amount or value of the claim to which the proceedings relate is $150 000 or less—the Warden's Court; or

 

(b) in any other case—the Land and Valuation Court;

 

relevant Minister means—

 

(a) in relation to the Adelaide Dolphin Sanctuary—the Minister to whom the administration of the Adelaide Dolphin Sanctuary Act 2005 is committed; or

 

(b) in relation to a marine park—the Minister to whom the administration of the Marine Parks Act 2007 is committed; or

 

(c) in relation to a River Murray Protection Area or the Murray-Darling Basin—the Minister to whom the administration of the River Murray Act 2003 is committed;

 

repealed Act means the Petroleum Act 1940;

 

River Murray Protection Area means a River Murray Protection Area under the River Murray Act 2003;

 

specially protected area means—

 

(a) the Adelaide Dolphin Sanctuary; or

 

(b) a marine park; or

 

(c) a River Murray Protection Area;

 

tenement means a lease, licence or other right relating to exploration for, or the production, recovery, management, conveyance, processing or delivery of, minerals or regulated resources (as the case requires) under any of the following:

 

(a) this Act;

 

(b) the Mining Act 1971 or the Opal Mining Act 1995;

 

(c) the Cooper Basin (Ratification) Act 1975, the Roxby Downs (Indenture Ratification) Act 1982 or the Stony Point (Liquids Project) Ratification Act 1981;

 

(d) any other Act brought within the ambit of this definition by the regulations;

 

transmission pipeline means a pipeline for conveying petroleum or another regulated substance from a point at or near the place of its production to another place or other places, or for conveying petroleum or another regulated substance to or near a place  where it is to be stored in a natural reservoir, (or a pipeline that forms part of a system of pipelines for that purpose) but does not include the following—

 

(a) a pipeline located within the area of a production or retention licence or the combined area of two or more production or retention licenses (not being part of a pipeline that extends beyond the area of such a licence); or

 

(b) a pipeline located within the site of an industrial plant; or

 

(c) a pipeline that forms part of a gas distribution system within a city, town or other centre of population or industry; or

 

(d) if a pipeline extends beyond State boundaries—the parts of the pipeline located outside the State; or

 

(e) a pipeline excluded by regulation from the ambit of this definition;

 

(2) A reference in this Act to petroleum or another regulated substance extends to a mixture of substances of which petroleum or the other relevant substance is a constituent part.

 

(3) For the purposes of this Act, the storage of a regulated substance may include circumstances where it is intended that the regulated substance be held indefinitely in a natural reservoir.

 

[…]

 

Part 3 - Licensing regulated activities

Division 1 - Requirement for licence

Regulated activities

10

(1) The following are regulated activities:

 

(a) exploration for petroleum or another regulated resource; or

 

(b) operations to establish the nature and extent of a discovery of petroleum or another regulated resource, and to establish the commercial feasibility of production and the appropriate production techniques; or

 

(c) production of petroleum or another regulated substance; or

 

(d) utilisation of a natural reservoir to store petroleum or another regulated substance (including in a case where a trace element naturally occurs with the petroleum or other regulated substance); or

 

(e) production of geothermal energy; or

 

(f) construction of a transmission pipeline for carrying petroleum or another regulated substance; or

 

(g) operation of a transmission pipeline for carrying petroleum or another regulated substance.

 

(2) However, exploratory operations conducted at a height of 500m or more above the surface of the ground are not regulated activities.

 

(3) A reference to a regulated activity includes all operations and activities reasonably necessary for, or incidental to, that activity such as (for example)—

 

(a) physical and geophysical surveys of land;

 

(b) the drilling of wells;

 

(c) the injection of water or some other substance into a natural reservoir in order to enhance production of petroleum or another regulated substance;

 

(d) forcing water or some other substance through a source of geothermal energy in order to absorb thermal energy and enable its recovery or utilisation at the surface;

 

(e) the processing of substances recovered from a well;

 

(f) the construction of borrow pits;

 

(g) the installation and operation of plant and equipment;

 

(h) the use of a natural reservoir to store a regulated substance;

 

(i) water disposal;

 

(j) the construction of roads, camps, airports, buildings and other infrastructure.

Classification of CO2

Summary

CO2 is included in the definition of “regulated substance” given in section 4 of the South Australia P&GE Act. This definition then links to the definition of “natural reservoir”, which includes a part of a geological structure suitable for the storage of petroleum or some other regulated substance.

Article/Section No.

Section 4

Instrument Text

Part 1 - Preliminary

Division 3 - Interpretation

Interpretation

4

(1) In this Act, unless the contrary intention appears—

 

[…]

natural reservoir means a part of a geological structure (including one that has been artificially modified)—

 

(a) in which petroleum or some other regulated substance has accumulated; or

 

(b) which is suitable for the storage of petroleum or some other regulated

substance;

 

[…]

regulated substance means—

 

(a) petroleum; or

 

(b) hydrogen sulphide; or

 

(c) nitrogen; or

 

(d) helium; or

 

(e) carbon dioxide; or

 

(ea) any other substance that naturally occurs in association with petroleum; or

 

(f) any substance declared by regulation to be a substance to which this Act applies;

 

[…]

Composition of CO2 stream

Summary

The definition of “regulated activities” given in section 10 of the South Australia P&GE Act includes utilisation of a natural reservoir to store CO2 (a “regulated substance” under section 4), including in cases where a trace element naturally occurs with the CO2.

This definition therefore permits the presence of naturally occurring trace elements within a CO2 stream.

Article/Section No.

Section 10

Instrument Text

Part 3 - Licensing regulated activities

Division 1 - Requirement for licence

Regulated activities

10

(1) The following are regulated activities:

 

(a) exploration for petroleum or another regulated resource; or

 

(b) operations to establish the nature and extent of a discovery of petroleum or another regulated resource, and to establish the commercial feasibility of production and the appropriate production techniques; or

 

(c) production of petroleum or another regulated substance; or

 

(d) utilisation of a natural reservoir to store petroleum or another regulated substance (including in a case where a trace element naturally occurs with the petroleum or other regulated substance); or

 

(e) production of geothermal energy; or

 

(f) construction of a transmission pipeline for carrying petroleum or another regulated substance; or

 

(g) operation of a transmission pipeline for carrying petroleum or another regulated substance.

 

(2) However, exploratory operations conducted at a height of 500m or more above the surface of the ground are not regulated activities.

 

(3) A reference to a regulated activity includes all operations and activities reasonably necessary for, or incidental to, that activity such as (for example)—

 

(a) physical and geophysical surveys of land;

 

(b) the drilling of wells;

 

(c) the injection of water or some other substance into a natural reservoir in order to enhance production of petroleum or another regulated substance;

 

(d) forcing water or some other substance through a source of geothermal energy in order to absorb thermal energy and enable its recovery or utilisation at the surface;

 

(e) the processing of substances recovered from a well;

 

(f) the construction of borrow pits;

 

(g) the installation and operation of plant and equipment;

 

(h) the use of a natural reservoir to store a regulated substance;

 

(i) water disposal;

 

(j) the construction of roads, camps, airports, buildings and other infrastructure.

II. The scope and management of rights
Property rights

Summary

Section 13A of the South Australia P&GE Act specifies that licenses are not personal property for the purposes of the Commonwealth’s Personal Property Securities Act 2009.

Article/Section No.

Section 13A

Instrument Text

Part 3 - Licensing regulated activities

Division 2 - Grant of licence

Licence is not personal property for the purposes of Commonwealth Act

13A

A licence is not personal property for the purposes of the Personal Property Securities Act 2009 of the Commonwealth.

Preferential rights between CCS operators

Summary

Under section 35 of the South Australia P&GE Act, where an area of land is already subject to an exploration licence, retention licence or mining tenement under the Mining Act 1971, only the holder of that licence or tenement will be entitled to be granted a gas storage licence over that area.

 

As a result, existing licence and mining tenement holders effectively have preference in being granted gas storage licenses over their existing licence or tenement areas. 

Article/Section No.

Section 35

Associated legislation:
Mining Act 1971

Instrument Text

Part 6 - Production

Grant of production licence

35

(1) Subject to this Act, a person is, on application, entitled to the grant of a production licence for the production of a regulated resource of a particular kind if—

 

(a) a regulated resource exists in the area for which the production licence is to be granted; and

 

(b) the person holds, or held at the time of the application for the production licence—

 

(i) an exploration licence or a retention licence over the area for which the production licence is to be granted; or

 

(ii) a mining tenement under the Mining Act 1971 over the area for which the production licence is to be granted; and

 

(c) —

 

(i) in a case where paragraph (b)(i) applies—the exploration licence authorised exploration for a regulated resource of the relevant kind or the retention licence was granted for a regulated resource of the relevant kind;

 

(ii) in a case where paragraph (b)(ii) applies—the mining tenement authorised operations for exploration for or the recovery of coal and the production licence is to be granted for in situ gasification or coal seam methane production (and other related activities as the Minister considers appropriate); and

 

(d) production is currently commercially feasible or is more likely than not to become commercially feasible within the next 24 months.

 

(2) If the holder of an exploration or retention licence is in default under the terms of the licence, the Minister may decline to grant a production licence until the default is remedied.

 

(3) If—

 

(a) the Minister is satisfied that—

 

(i) a regulated resource exists in a particular area; and

 

(ii) production is currently commercially feasible or is more likely than not to become commercially feasible within the next 24 months; but

 

(b) there is no person who is currently entitled to the grant of a production licence under subsection (1),

 

the Minister may call for tenders for the grant of a production licence and grant a production licence to the applicant who submits the successful tender.

 

(4) Subsections (1)(b) and (c) do not apply if the application is for a gas storage licence.

Third party access to storage sites

Summary

Section 79 of the South Australia P&GE Act provides that if:

  1. a natural reservoir exists in a licence area;
  2. a person other than the licence holder wishes to access the reservoir to store a regulated substance (which is defined in section 4 to include CO2); and
  3. the parties fail to reach agreement on the terms and conditions of such access and use,

then the Minister may determine what he or she considers to be fair and reasonable commercial terms and conditions for the person’s access to and use of the reservoir.

 

Determinations under section 79 are binding on both parties.  

Article/Section No.

Section 79

Instrument Text

Part 11 - General provisions about licenses

Division 5 - Reservoir access

Access to natural reservoir

79

 

(1) If—

 

(a) there is a natural reservoir in the area of a licence that is, in the Minister's opinion, suitable for use for the storage of a regulated substance; and

 

(b) a person (the applicant) who is not the holder of the relevant licence seeks access to the natural reservoir for the storage of a regulated substance; and

 

(c) the applicant, after making reasonable attempts to do so, fails to reach agreement with the licensee on terms and conditions of access to and use of the natural reservoir, the Minister may, by notice in writing given to the applicant and the holder of the licence, determine terms and conditions (which the Minister considers to be fair and reasonable commercial terms) on which the applicant is to be entitled to access to and use of the reservoir.

 

(2) In considering whether to make a determination under this section and, if so, the terms and conditions of the determination, the Minister must have regard to—

 

(a) the legitimate business interests of the licensee; and

 

(b) the public interest including the public interest in facilitating competition in markets; and

 

(c) the interests of persons other than the immediate parties to the determination that might be affected by the determination; and

 

(d) the operational requirements for the safe, efficient and reliable use of the natural reservoir; and

 

(e) any other matters the Minister considers relevant.

 

(3) Before making a determination under this section, the Minister must give the interested parties a reasonable opportunity to comment on the proposed determination.

 

(4) A determination under this section is binding on the holder of the licence and the applicant.

 

(5) Access may be granted on terms under which the person to whom the right of access is granted is required to take out a licence for the purpose of exercising the right of access arising under the determination.

 

(6) A party to a determination under this section may appeal against the determination to the Land and Valuation Court.

 

(7) On an appeal under this section—

 

(a) the Court may confirm the Minister's determination; or

 

(b) the Court may cancel the Minister's determination if satisfied that it is not fair and reasonable that the applicant should have access to the natural reservoir; or

 

(c) the Court may vary the terms and conditions of the determination as the Court considers fair and reasonable.

 

(8) The Court may make incidental and ancillary orders (including orders for costs).

Public participation

Summary

<p>The South Australia P&GE Act requires the Minister to maintain the following registers, and make them publicly available in accordance with the following terms:</p> <ol> <li>Environmental register: a register containing, among other things, copies of all environmental impact reports, environmental impact assessments and approved statements of environmental objectives, which must be available for inspection without fee, and copies of material on the register available for purchase (see sections 106 and 107).</li> <li>Public register: a register of licenses issued under the Act, which must also be available for inspection without fee, and copies of material on the register available for purchase (see sections 115 and 116).</li> <li>Commercial register: a register of each document recording or effecting a registrable dealing (as defined in section 112) in relation to a licence, which must be available for inspection by persons authorised by the Minister or someone with an interest in the licence or dealing (see sections 117 and 118). </li> </ol>

Article/Section No.

Section 112
Section 115
Section 116
Section 117
Section 118

Instrument Text

Division 5 - The environmental register

Environmental register

106

 

(1) The Minister must maintain an environmental register.

 

(2) The register must contain—

 

(a) a copy of every environmental impact report prepared for the purposes of this Act; and

 

(b) a copy of the current criteria for the classification of regulated activities; and

 

(c) a copy of every classification of regulated activities made by the Minister under this Part; and

 

(d) a copy of every current statement (or revised statement) of environmental objectives approved under this Act and a copy of the environmental impact report on which the statement is based; and

 

(e) a copy of every environmental impact assessment affecting regulated activities under the Development Act 1993; and

 

(f) a copy of every report provided under reporting obligations imposed by a statement of environmental objectives.

 

Environmental register to be available for inspection

107

 

(1) The environmental register is to be available for inspection, without fee, during ordinary office hours at a public office, or public offices, determined by the Minister.

 

(2) The Minister must ensure that copies of material on the environmental register can be purchased for a reasonable fee at the public office, or public offices, at which the register is kept available for inspection.

 

(3) The Minister must ensure that the environmental register can be inspected at the department's website.

 

[…]

 

Part 13 - Registrable dealings

Division 1 - Registrable dealings

Registrable dealings

112

 

The following are registrable dealings:

 

(a) any transaction under which the interest conferred by a licence is mortgaged, charged, or made the security for a liability;

 

(b) a joint venture agreement, farm in agreement, joint operating agreement or other transaction under which a person acquires, or may acquire, an interest in—

 

(i) resources discovered, utilised or recovered under an exploration, retention or production licence; or

 

(ii) the proceeds of any business conducted under a licence;

 

(c) the transfer or assignment of a licence or an interest in a licence.

 

[…]

 

Division 2 - The public register

Public register

115

 

(1) The Minister must maintain a public register of licenses.

 

(2) The register must contain—

 

(a) the terms and conditions of each licence issued under this Act; and

 

(b) the name of the licensee; and

 

(c) an accurate description of the licence area or in the case of a pipeline licence the route of the pipeline; and

 

(d) a note of any registrable dealing affecting the licence; and

 

(e) any other information (other than commercially sensitive information) the Minister considers appropriate to the public register.

 

(3) The public register may be kept in the form of a computer record.

 

Public register to be available for inspection

116

 

(1) The public register is to be available for inspection, without fee, during ordinary office hours at a public office, or public offices, determined by the Minister.

 

(2) The Minister must ensure that copies of material on the public register can be purchased for a reasonable fee at the public office, or public offices, at which the register is kept available for inspection.

 

(3) The Minister must ensure that the public register can be inspected at the department's website (but is not required to have available for inspection on the website material that was included in the register before the commencement of this Act unless the Minister has the material in the form of electronic data).

 

Division 3 - The commercial register

Commercial register

117

 

(1) The Minister must maintain a commercial register.

 

(2) The commercial register must contain, in relation to each licence—

 

(a) a copy of each document, related to the licence, effecting or recording the terms of a registrable dealing; and

 

(b) other information the Minister considers appropriate to the commercial register.

 

(3) The commercial register may be kept in the form of a computer record.

 

Authority to search register

118

 

(1) A person is entitled to have access to the material included in the commercial register, on payment of the prescribed inspection fee, if the access is authorised by—

 

(a) a person who has a legal or equitable interest in the relevant licence or registered dealing; or

 

(b) the Minister.

 

(2) The Minister must not authorise access under subsection (1)(b) unless the Minister has

consulted with the licensee to whom the material relates and is satisfied that access

should be authorised in the public interest.

III. Permitting storage site exploration, project development and CO2 injection
Permitting exploration activities

Summary

The definition of “regulated activities” given in section 10 of the South Australia P&GE Act includes:

  1. exploration for natural reservoirs (which are a “regulated resource” under section 4); and
  2. operations to establish the nature and extent of a natural reservoir.

 

Section 11 prohibits engagement in a regulated activity unless the activity is authorised under the Act.

 

The following licenses may be issued by the Minister under Parts 3 and 4 of the Act to authorise exploration and related activities:

  1. a one year, non-exclusive preliminary survey licence, to carry out surveys, environmental evaluations and other assessments preparatory to the carrying out of regulated activities (see section 14);
  2. a one year, non-exclusive speculative survey licence authorising the carrying out of specified exploratory operations in the licence area (see section 17); and
  3. a gas storage exploration licence, authorising exploratory operations for natural reservoirs, operations to establish the nature and extent of a discovery of a natural reservoir, and operations to establish the feasibility of storage and appropriate storage techniques (see section 21).

 

Under section 26, gas storage exploration exploration licenses continue for a term of five years, and may be renewable either once, in which case at least 50% of the original licence area must be excised on renewal, or twice, in which case at least 33⅓% of the original licence area must be excised on each renewal.

Part 5 of the Act provides for the issuance of gas storage retention licenses, to facilitate the testing of a natural reservoir for the storage of CO2 where the Minister is satisfied that such storage is not currently commercially feasible, but is more likely than not to become commercially feasible within fifteen years.

 

Applications for retention licenses may only be made by a person who holds an exploration licence or production licence over the area for which the retention licence is sought.

 

In addition to exploration and storage licenses, Part 9 of the Act provides for the granting of associated activities licenses, to authorise anything reasonably necessary for, or incidental to, the carrying on of regulated activities in the area or vicinity of the primary licence area.

 

Part 11 of the Act sets out a range of general licence provisions which include, among others, provisions relating to:

  1. compatibility between petroleum, geothermal energy and gas storage licenses, and the circumstances where two such licenses may apply simultaneously to the same area (see Division 2);
  2. conditions to which licenses under the Act are subject, e.g. in relation to information and records, compliance with environmental obligations and additional discretionary conditions (see Division 3);
  3. annual fees payable be licensees (see Division 4); and
  4. third party access to natural reservoirs in the licence area (see Division 5).

Licenses may be:

  1.  surrendered under section 89;
  2. suspended by agreement under section 90; or
  3. suspended or cancelled for disciplinary purposes under section 91.

Article/Section No.

Section 10
Section 11
Section 12
Section 13
Section 13A
Section 14
Section 15
Section 16
Section 17
Section 18
Section 19
Section 20
Section 21
Section 22
Section 23
Section 24
Section 25
Section 26
Section 27
Section 28
Section 29
Section 30
Section 31
Section 32
Section 33
Section 56
Section 57
Section 58
Section 59
Section 65
Section 66
Section 67
Section 68
Section 69
Section 70
Section 71
Section 72
Section 73
Section 74
Section 75
Section 76
Section 77
Section 78
Section 79
Section 89
Section 90
Section 91

Instrument Text

Part 3 - Licensing regulated activities

Division 1 - Requirement for licence

Regulated activities

10

 

(1) The following are regulated activities:

 

(a) exploration for petroleum or another regulated resource; or

 

(b) operations to establish the nature and extent of a discovery of petroleum or another regulated resource, and to establish the commercial feasibility of production and the appropriate production techniques; or

 

(c) production of petroleum or another regulated substance; or

 

(d) utilisation of a natural reservoir to store petroleum or another regulated substance (including in a case where a trace element naturally occurs with the petroleum or other regulated substance); or

 

(e) production of geothermal energy; or

 

(f) construction of a transmission pipeline for carrying petroleum or another regulated substance; or

 

(g) operation of a transmission pipeline for carrying petroleum or another regulated substance.

 

(2) However, exploratory operations conducted at a height of 500m or more above the surface of the ground are not regulated activities.

 

(3) A reference to a regulated activity includes all operations and activities reasonably necessary for, or incidental to, that activity such as (for example)—

 

(a) physical and geophysical surveys of land;

 

(b) the drilling of wells;

 

(c) the injection of water or some other substance into a natural reservoir in order to enhance production of petroleum or another regulated substance;

 

(d) forcing water or some other substance through a source of geothermal energy in order to absorb thermal energy and enable its recovery or utilisation at the surface;

 

(e) the processing of substances recovered from a well;

 

(f) the construction of borrow pits;

 

(g) the installation and operation of plant and equipment;

 

(h) the use of a natural reservoir to store a regulated substance;

 

(i) water disposal;

 

(j) the construction of roads, camps, airports, buildings and other infrastructure.

 

Requirement for licence

11

 

A person must not engage in a regulated activity unless the activity is authorised under this Act.

Maximum penalty: $120 000.

 

Division 2—Grant of licence

General authority to grant licence

12

 

(1) The Minister may, subject to this Act, grant a licence.

 

(2) If an application for the grant or renewal of a licence relates to an area within or adjacent to a specially protected area, the Minister must, before making his or her decision on the application, refer the application to the relevant Minister and consult

with the relevant Minister in relation to the matter.

 

(3) If an application for the grant or renewal of a licence is referred to a relevant Minister and the Minister to whom the administration of this Act is committed and the relevant Minister cannot agree—

 

(a) on whether a licence should be granted or renewed; or

 

(b) if a licence is granted or renewed, on the conditions to which the licence should be subject,

 

the Ministers must take steps to refer the matter to the Governor and the Governor will determine the matter (and any decision taken by the Governor will be taken to be a decision of the Minister under this Act).

 

Licence classes

13

 

Licenses are of the following classes:

 

(a) preliminary survey licence; and

 

(b) speculative survey licence; and

 

(c) exploration licence (with 3 categories of licence under this Act); and

 

(d) retention licence (with 3 categories of licence under this Act); and

 

(e) production licence (with 3 categories of licence under this Act); and

 

(f) pipeline licence; and

 

(g) associated activities licence; and

 

(h) special facilities licence.

 

Licence is not personal property for the purposes of Commonwealth Act

13A

 

A licence is not personal property for the purposes of the Personal Property Securities Act 2009 of the Commonwealth.

 

Division 3—Preliminary survey licence

Preliminary survey licence

14

 

(1) A preliminary survey licence authorises the licensee to carry out a survey, environmental evaluation, or other form of assessment preparatory to the carrying out of regulated activities on land.

 

(2) A preliminary survey licence may authorise incidental matters such as (for example) marking out the proposed route of a pipeline on land.

 

(3) The rights conferred on the holder of a preliminary survey licence are not exclusive.

 

(4) The Minister may, on application by a licensee holding a preliminary survey licence, approve the variation of the area to which the licence relates.

 

Term of preliminary survey licence

15

 

(1) The term of a preliminary survey licence is 1 year.

 

(2) A preliminary survey licence may be renewed from time to time for a further term.

 

Part 4—Exploration

Division 1—Competitive tender regions

Competitive tender regions

16

 

(1) If the Minister considers a particular part of the State to be highly prospective for petroleum exploration or for exploration for other regulated resources, the Minister may, by notice in the Gazette, designate that part of the State as a competitive tender region.

 

(2) The notice may specify regulated resources in relation to which the region is to be regarded as highly prospective and, in that case, the region will be regarded as highly prospective for those resources but not in relation to other regulated resources (and the designation under subsection (1) will not apply in relation to the other regulated

resources).

 

(3) The Minister may, by subsequent notice in the Gazette, vary or revoke a notice under this section.

 

Division 2—Speculative survey

Speculative survey licence

17

 

(1) A speculative survey licence authorises the licensee to carry out exploratory operations of the kind specified in the licence in the licence area.

 

(2) A speculative survey licence cannot authorise drilling beyond a depth of 300 metres.

 

(3) The right to carry out exploratory operations conferred by a speculative survey licence is not an exclusive right.

 

Area of speculative survey licence

18

 

(1) A speculative survey licence may be granted for 1 or more separate areas.

 

(2) However, the total area of a speculative survey licence cannot exceed 10 000 km2.

 

Term of speculative survey licence

19

 

(1) The term of a speculative survey licence is 1 year.

 

(2) A speculative survey licence may be renewed, from time to time, for a further term.

 

Consultation preceding grant or renewal of speculative survey licence

20

 

Before a speculative survey licence is granted or renewed over the area, or part of the area, of an existing licence, the applicant for the speculative survey licence must—

 

(a) consult with the existing licensee and seek to reach agreement on the activities to be carried out under the speculative survey licence on the area that is to be subject to both licenses; and

 

(b) inform the Minister of the result of the consultation.

 

Division 3—Exploration licenses

Exploration licenses

21

 

(1) There will be 3 categories of exploration licence:

 

(a) a petroleum exploration licence;

 

(b) a geothermal exploration licence;

 

(c) a gas storage exploration licence.

 

(2) An exploration licence authorises subject to its terms the licensee to carry out in the licence area—

 

(a) exploratory operations for regulated resources of the kind relevant to the category of licence; and

 

(b) with respect to regulated resources of the kind relevant to the category of licence—operations—

 

(i) to establish the nature and extent of a discovery of regulated resources;

 

(ii) to establish the feasibility of production and appropriate production techniques.

 

(3) A licensee who holds an exploration licence is entitled, subject to this Act, to the grant of a corresponding retention licence or a corresponding production licence for a regulated resource discovered in the licence area.

 

Call for tenders

22

 

(1) The Minister must call for tenders for an exploration licence of the relevant category in the following cases:

 

(a) where the exploration licence is to be granted for an area within a competitive tender region (taking into account the regulated resources with respect to which the region has been declared); or

 

(b) where a person has unsuccessfully applied for an exploration licence for the relevant area (but not in response to a call for tenders) and asks the Minister to call for tenders for an exploration licence for the relevant area (taking into account the category of licence).

 

(2) The Minister has a discretion to call for tenders for an exploration licence in other cases.

 

(3) A call for tenders is made by notice published in the Gazette inviting applications for the grant of an exploration licence of the relevant category for an area specified in the notice.

 

(4) The notice—

 

(a) must specify a period within which applications are to be made; and

 

(b) must state the criteria by reference to which applications are to be evaluated; and

 

(c) may include information about any special terms and conditions subject to which the exploration licence is to be granted; and

 

(d) may include other information the Minister considers appropriate.

 

(5) The selection of an applicant is not complete until the applicant executes the licence.

 

(6) On the selection of a successful applicant from among those who apply in response to an advertisement under this section, the Minister must—

 

(a) publish in the Gazette a statement of the basis for the selection of the successful applicant, including the successful applicant's proposed work program; and

 

(b) give any unsuccessful applicant written notice of the reasons for the rejection of the application.

 

Criteria to be considered for granting exploration licence

23

 

In considering an application for the grant of an exploration licence, the Minister must have regard to—

 

(a) the suitability of applicant's proposed work program for evaluating the prospectivity of the licence area and discovering regulated resources; and

 

(b) the adequacy of the applicant's technical and financial resources; and

 

(c) if applications have been invited for the licence by public advertisement—the stated criteria for evaluation of the applications.

 

Areas for which licence may be granted

24

 

(1) An exploration licence may be granted for 1 or more separate areas.

 

(2) However, the total licence area cannot exceed—

 

(a) in the case of a gas storage exploration licence—2 500 km2;

 

(b) in the case of a geothermal exploration licence—3 000 km2;

 

(c) in the case of a petroleum exploration licence—10 000 km2.

 

Work program to be carried out by exploration licensee

25

 

(1) It is a mandatory condition of an exploration licence that the licensee must carry out work in the licence area in accordance with a work program approved by the Minister.

 

(2) A proposed work program is to be submitted for the Minister's approval with an application for the grant or renewal of an exploration licence.

 

(3) The Minister may approve the proposed work program with or without addition or variation.

 

(4) The Minister may approve deferment, variation or reduction of the work to the carried out under an approved work program.

 

(4a) However, Ministerial approval is not required for the acceleration of the work to be carried out under an approved work program.

 

(5) If a licence was granted on the basis of competitive tender, the Minister—

 

(a) must, before approving deferment, variation or reduction of the work to be carried out under an approved work program—have regard to work programs proposed by other applicants for the licence; and

 

(b) must publish in the Gazette notice of the approval stating the effect of the approval.

 

(6) The Minister may, as a condition of approving the reduction or deferment of work under subsection (4), require the licensee to relinquish a specified portion of the licence area.

 

Term and renewal of exploration licence

26

 

(1) The term of an exploration licence is 5 years.

 

(2) An exploration licence may be granted on terms under which the licence is to be renewable for a further term or 2 further terms (as specified by the Minister at the time of the grant of the licence).

 

(3) Subject to a succeeding subsection, a licence that is renewable for one further term must provide for the excision, on renewal, of an area equal to at least 50% of the original licence area and a licence that is renewable for 2 further terms must provide for the excision, on each renewal, of an area equal to at least 33?% of the original licence area.

 

(4) The area to be excised is to be determined by the Minister—

 

(a) if the licensee puts a proposal to the Minister in the application for renewal of the licence and the Minister accepts the proposal—on the basis of that proposal; or

 

(b) in any other case—after the Minister has put a proposal to the licensee and has considered any representations made by the licensee within 14 days after notice of the proposal is given to the licensee.

 

(5) The Minister must accept the licensee's proposal under subsection (4)(a) if it reasonably allows for the grant of new exploration licenses over the area or areas to be excised.

 

(5a) Subsections (3), (4) and (5) do not apply in relation to a gas storage exploration licence.

 

(5b) The area to be subject to an excision under subsection (3) will be reduced by an amount equal to the area of any production licence or retention licence granted during the immediately preceding term of the exploration licence.

 

(6) When a licence falls due for renewal, the licensee, if not in default under the licence, is entitled to the renewal of the licence in accordance with the terms of the licence.

 

Production of regulated resource under exploration licence

27

 

(1) The holder of a petroleum exploration licence may produce a regulated substance from a well in the licence area for the purpose of establishing the nature and extent of a discovery.

 

(1a) The holder of a geothermal exploration licence may produce geothermal energy from a well in the licence area for the purpose of establishing the nature and extent of a discovery.

 

(2) However, the licensee must not produce a regulated resource from a well for more than 10 days in aggregate without the Minister's approval.

Maximum penalty: $20 000.

 

(2a) The holder of a gas storage exploration licence may place petroleum or another regulated substance in a natural reservoir for the purpose of establishing the suitability of the natural reservoir for storage purposes.

 

(3) The Minister may grant an approval under this section on conditions the Minister considers appropriate.

 

Part 5—Retention

Retention licenses

28

 

(1) There will be 3 categories of retention licence:

 

(a) a petroleum retention licence;

 

(b) a geothermal retention licence;

 

(c) a gas storage retention licence.

 

(2) A retention licence protects the interests of the licensee in a regulated resource of the kind relevant to the category of the licence for a reasonable period in connection with 1 or more of the following purposes:

 

(a) to facilitate—

 

(i) proper evaluation of the productive potential of a discovery that has been made by the licensee; or

 

(ii) carrying out the work necessary to bring the discovery to commercial production; or

 

(iii) without limiting a preceding subparagraph, in the case of a gas storage retention licence—the testing of the natural reservoir for the storage of petroleum or another regulated substance;

 

(b) without limiting paragraph (a), to provide a means by which the licensee may maintain an interest in a regulated resource until production is commercially feasible (subject to limits and conditions under this Act);

 

(c) to facilitate other activities considered appropriate by the Minister.

 

(3) Accordingly, a retention licence authorises the licensee to carry out in the licence area (according to the terms of the licence)—

 

(a) operations to establish the nature and extent of a discovery of regulated resources; and

 

(b) operations to establish the commercial feasibility of production and appropriate production techniques; and

 

(c) other regulated activities specified in the licence.

 

Grant of retention licence

30

 

(1) Subject to this Act, a person is, on application, entitled to the grant of a petroleum retention licence or a geothermal retention licence in respect of a discovery of a relevant resource if—

 

(a) a regulated resource has been discovered in the area for which the retention licence is to be granted and the existence of the regulated resource has been demonstrated by the drilling of at least one well; and

 

(b) the person holds, or held at the time of the application for the retention licence, an exploration licence or a production licence over the area for which the retention licence is to be granted; and

 

(c) the exploration licence or production licence authorised exploration for or production of a regulated resource of the relevant kind; and

 

(d) the Minister is satisfied that production of the regulated resource is not currently commercially feasible, but is more likely than not to become commercially feasible within 15 years.

 

(1a) Subject to this Act, a person is, on application, entitled to the grant of a gas storage retention licence in respect of a natural reservoir if the Minister is satisfied as to 1 or both of the following:

 

(a) that it is reasonable to facilitate the testing of the natural reservoir for the storage of petroleum or another regulated substance;

 

(b) that the use of the natural reservoir for the storage of petroleum or another regulated substance is not currently commercially feasible or reasonable (including by virtue of the fact that production of petroleum or another regulated substance from a related area is not currently commercially feasible).

 

(2) If the holder of an exploration or production licence is in default under the terms of the licence, the Minister may decline to grant a retention licence until the default is remedied.

 

Area of retention licence

31

 

(1) The area of a petroleum retention licence must not exceed either of the following limits:

 

(a) twice the area under which (according to a reasonable estimate at the time when the licence was granted or last renewed) the discovery is likely to extend;

 

(b) 100 km2.

 

(2) The area of a geothermal retention licence or gas storage retention licence must not exceed 1 000 km2.

 

Term of retention licence

32

 

(1) The term of a retention licence is 5 years.

 

(2) A retention licence may be renewed from time to time for a further term but only if the Minister is satisfied that production is not currently commercially feasible but is more likely than not to become commercially feasible within the next 15 years.

 

(3) However, in the case of a gas storage retention licence it is unnecessary to be satisfied as to the 15 year period referred to in subsection (2) unless the Minister assesses or determines that the natural reservoir is more likely than not to be used in connection with the production of petroleum.

 

(4) Subsection (3) does not derogate from the operation of section 36 or 79.

 

Work program to be carried out by retention licensee

33

 

(1) A retention licence may include a mandatory condition requiring the licensee to carry out work, in accordance with a work program approved by the Minister, for either or both of the following purposes:

 

(a) to establish the nature and extent of a discovery of regulated resources;

 

(b) to establish the commercial feasibility of production and appropriate production techniques.

 

(2) A work program to be carried out under the licence must, if the Minister so requires, be submitted with the application for the licence and from time to time as required under the conditions of the licence.

 

(3) The Minister may approve a proposed work program with or without addition or variation.

 

(4) The Minister may, on application by a licensee—

 

(a) approve deferment of the work to be carried out under an approved work program; and

 

(b) approve variation of the work program by substitution for work previously programmed of work that is, in the Minister's opinion, of equal or greater value.

 

(5) To avoid doubt, Ministerial approval is not required for the acceleration of work to be carried out under an approved work program.

 

Part 9—Associated activities

56—Associated activities licence

(1)     An associated activities licence— (a)        authorises the holder of the licence (the primary licence)—

(i)      to establish and operate associated facilities on land outside the area of the primary licence;

(ii)     without limiting subparagraph (i), to carry out any type of associated regulated activity on land outside the area of the primary licence;

(b)     for that purpose, confers rights of access to and use of land to which the licence relates on terms and conditions specified in the licence.

(2)     An associated facility or an associated regulated activity is anything that is reasonably necessary for, or incidental to, carrying on regulated activities in the area of the primary licence, or in the vicinity of the area of the primary licence.

(3)     For example—

(a)     an associated activities licence might be granted to the holder of an exploration licence, a retention licence or a production licence authorising the holder of the licence to drill a well from an area outside the area of the primary licence for obtaining access to geological structures within the area of the primary licence;

(b)     an associated activities licence might be granted authorising the holder of the licence to establish and operate facilities within the licence area such as—

(i)      a pipeline; (ii)      a processing plant;

(iii)    a camp, airport, building or other infrastructure;

(iv)    commercial or recreational facilities for people involved in regulated activities.

57—Area of associated activities licence

(1)     An associated activities licence cannot be granted for an area exceeding—

(a)     in a case involving facilities or activities that, in the opinion of the Minister, are permanent (or effectively permanent)—5 km2;

(b)     in any other case—1 500 km2.

(2)     However, these restrictions on the area of a licence do not apply if the licence area is in the form of a corridor with a width of 50m or less.

58—Term of associated activities licence

(1)        Subject to subsection (2), an associated activities licence is an adjunct to the primary licence and is, subject to its terms, granted for the same term, and renewable at the same time and in the same way as the primary licence.

59—Relationship with other licences

(1)     An associated activities licence may be granted in respect of an area comprised within the area of another licence.

(2)     Subject to any relevant licence conditions, the rights conferred by an associated activities licence prevail over rights conferred by another licence in respect of the same area.

(3)        Before the Minister grants an associated activities licence for an area covered by another licence—

(a) the Minister must have regard to—

(i)      the reasons put forward by the applicant for the grant of the licence and, in particular, whether they justify the grant of the licence in derogation from the rights of the existing licensee; and

(ii)     the legitimate business interests of the existing licensee; and

(iii)    the effect of the operations to be carried out under the associated activities licence on the operations conducted under the existing licence; and

(iv)    the operational and technical requirements for the safe, efficient and reliable conduct of operations under both licences; and

(v)     any other matters the Minister considers relevant; and

(b) the Minister must consult with the existing licensee about the matters referred to in paragraph (a) and about the conditions to be included in the licence.

(4)     If an associated activities licence is granted over the area of another licence, the holder of the other licence is to be entitled to compensation for diminution of the rights conferred by that licence—

(a)     to be agreed between the licensees; or

(b)     in default of agreement, to be determined by the relevant court.

(5)     If an associated activities licence is granted over the area of another licence, the Land and Valuation Court may, on application by the holder of the other licence made within 2 months after the grant of the associated activities licence, review the terms and conditions of the associated activities licence and vary them as the Court considers just.

(6)        The Land and Valuation Court may, in exercising its powers under subsection (5), relocate the area of the associated activities licence or vary the area in some other way.

[…]

Part 11—General provisions about licences

Division 1—General provision about applications 65—Application for licence

(1) An application for a licence—

(a)     must be made in an approved form; and

(b)     if the licence is to contain a mandatory condition requiring the licensee to carry out work in accordance with an approved work program—must be accompanied by a proposed work program for the first term of the licence; and

(c)     must be accompanied by a statement of the financial and technical resources available to the applicant; and

(d)     must contain other information required in the approved form; and

(e)     must be accompanied by the fee prescribed by the regulations.

(1a) If an application for an exploration licence is made in accordance with this Act (the relevant application), the relevant application will, for the purposes associated with its consideration and any grant of an exploration licence on the basis of the application, rank ahead of any other application for an exploration licence for an overlapping area received by the Minister after the time that the Minister received the relevant application.

(1b) Subsection (1a) does not apply if the application is in response to a call for tenders under section 22.

(1c) A ranking established under subsection (1a) will cease to apply if the Minister cancels the ranking on the ground—

(a)     that the applicant has failed to comply with a requirement under this Act (in accordance with any relevant time requirement); or

(b)     that the application is found to be invalid; or

(c)     that there is some other default, defect or circumstances that the Minister considers is sufficiently significant to warrant the cancellation of the ranking.

(2) An application for the renewal of a licence—

(a)     must be made to the Minister in an approved form at least 2 months before the end of the licence term preceding the proposed renewal; and

(b)     must contain other information required by the Minister; and

(c)     if the licence contains a mandatory condition requiring the licensee to carry out work in accordance with an approved work program—must be accompanied by a proposed work program for the term of the renewal; and

(d)     must be accompanied by the fee prescribed by the regulations.

(3) The Minister may require an applicant for the grant or renewal of a licence to provide any further information, documents or materials to assist in assessing and determining the application.

(4)     If an applicant fails to comply with a requirement under subsection (3) within a reasonable time allowed by the Minister (which must be at least 30 days), the application lapses.

(5)     If an application for the renewal of a licence is made before the end of the term of the licence, the licence term is extended until the application is determined.

(6)     Notice of an application for the grant of a production licence, and notice of an application for the grant or renewal of a pipeline licence, associated activities licence or special facilities licence, must be published in the Gazette in accordance with a determination of the Minister before the application is determined.

66—Preconditions of grant or renewal of licence

(1)     The Minister may offer a licence to a particular applicant on condition that—

(a)     the applicant is to return the executed licence to the Minister within a specified period; and

(b)     if the applicant fails to do so—the offer lapses and the licence may be offered to someone else.

(2)     As a condition of granting or renewing a licence, the Minister may require the applicant to give security, of a kind and amount acceptable to the Minister, for the satisfaction of obligations arising under this Act or the licence.

Division 2—Extent of licence exclusivity

67—Application of Division

This Division applies to licences of the following classes: (a)        exploration licence; (b)     retention licence; (c)         production licence.

68—Extent to which same area may be subject to different licences

(1)     A licence to which this Division applies is compatible with another licence to which this Division applies if—

(a)     1 relates to a source of geothermal energy and the other does not; or

(b)     1 relates to gas storage and the other does not.

(3)     The same area cannot be simultaneously subject to two or more licences to which this Division applies unless the licences are compatible.

(4)     For the purposes of this section, if a person who is entitled to the grant of a licence to which this Division applies makes an application for such a licence, the area to which the application relates is to be taken to be subject to a licence to which this Division applies until the application is determined.

(5)        This section does not derogate from the operation of Division 5.

69—Grant of compatible licence to area already under licence

(1)     Before the Minister grants a compatible licence in respect of an area that is already wholly or partly subject to a licence to which this Division applies, the Minister must consult with the existing licensee (unless the existing licensee is the person seeking the compatible licence).

(2)     The Minister must, in acting under subsection (1), seek to consult on—

(a)     the reasons put forward by the applicant for the grant of the relevant licence; and

(b)     the legitimate business interests of the holder of the existing licence; and

(c)     the effect of the operations to be carried out under the proposed licence on the operations carried out under the existing licence; and

(d)     the operational and technical requirements for the safe, efficient and reliable conduct of operations under both licences,

(and the Minister may consult on such other matters as the Minister considers relevant).

70—Interrelationship between rights of licensees under compatible licences

If a licensee discovers a regulated resource in an area subject to two or more compatible licences, the rights under this Act in respect of the discovery attach to the licensee who holds a licence for a regulated resource of the relevant kind irrespective of whether that licensee actually made the discovery.

71—Excision of licence areas

If—

(a)     a retention licence is granted to the holder of an exploration licence or a production licence in respect of part only of the area comprised in the earlier licence; or

(b)     a production licence is granted to the holder of an exploration licence or a production licence in respect of part only of the area comprised in the earlier licence,

the area of the new licence is excised from the area of the earlier licence.

Division 3—Licence conditions 72—Mandatory conditions

A licence must include the conditions designated in this Act as mandatory conditions.

73—Mandatory condition as to use of information etc

It is a mandatory condition of every licence that the licensee authorises the Minister—

(a)     to make use of information and records provided by the licensee under this Act; and

(b)        to disclose information and records provided by the licensee under this Act as authorised by the regulations.

74—Classification of activities to be conducted under licence

(1)     A licence is to include mandatory conditions dividing the regulated activities to be carried out under the licence into—

(a)     activities requiring high level official surveillance; or

(b)     activities requiring low level official surveillance.

(2)     The activities are to be classified as requiring high level official surveillance unless the licensee satisfies the Minister that, in view of the licensee's demonstrated competence to comply with the requirements of this Act and the conditions of the licence, the activities should be classified as requiring low level official surveillance.

(3)     The mandatory conditions are to provide as follows:

(a)     the Minister's prior written approval is required for activities requiring high level official surveillance; and

(b)     notice of activities requiring low level official surveillance is to be given as required in the conditions or by regulation.

(4)     The Minister may, by written notice to a licensee, change the classification of activities under the relevant licence conditions.

(5)     If regulated activities to be conducted under a licence are generally or substantially classified as requiring a low level of official surveillance, the annual licence fee payable for the licence will be reduced by an amount not exceeding 50% of the fee according to a determination of the Minister as to the level of official surveillance required under the licence.

75—Mandatory condition about resources required for compliance with environmental obligations

It is a mandatory condition of every licence that the licensee must have adequate technical and financial resources to ensure compliance with the licensee's environmental obligations (including the rehabilitation of land adversely affected by regulated activities carried out under the licence).

76—Discretionary conditions

(1)     A licence may be granted on other conditions (discretionary conditions) the Minister considers appropriate.

(2)     The discretionary conditions of the licence may (for example) include a condition requiring the licensee to maintain insurance on terms and conditions approved by the Minister insuring the licensee and the State against obligations arising from regulated activities under the licence.

(3)     The Minister may add a discretionary condition to a licence, or vary or revoke a discretionary condition of a licence—

(a)        on the renewal of the licence; or (b)    at any other time with the agreement of the licensee.

76A—Suspension of conditions of licence by agreement

(1)     The Minister may, by agreement with the licensee, suspend, either for a specified period or indefinitely, any of the conditions attached to a licence (including a mandatory condition).

(2)     The Minister may, as or when the Minister thinks fit, terminate a suspension under subsection (1).

(3)     If a suspension is put in place under subsection (1), the Minister may, if relevant, by the instrument of suspension or by a later instrument furnished to the licensee, extend the period of the licence by a period not exceeding the period of the suspension.

77—Non-compliance with licence conditions

If a licence condition is not complied with, the licensee is guilty of an offence. Maximum penalty: $120 000.

Division 4—Annual fees 78—Annual fees

(1)     A licensee must pay to the Minister annually and in advance a fee appropriate to the relevant licence fixed by, or calculated in accordance with, the prescribed scale.

(2)     If a licensee fails to pay a fee in accordance with subsection (1)—

(a)     the amount in arrears will, unless the Minister determines otherwise, be increased by penalty interest at the prescribed rate; and

(b)     the Minister may impose on the licensee a fine of an amount fixed by the Minister up to a limit of $1,000 or 10% of the outstanding fee, whichever is the greater.

(3)     The Minister may for any proper reason remit penalty interest or a fine imposed under subsection (2) wholly or in part.

(4)     A fee (and any penalty interest or fine imposed by the Minister under this section) may be recovered as a debt due to the Crown.

Division 5—Reservoir access

79—Access to natural reservoir

(1) If—

(a)     there is a natural reservoir in the area of a licence that is, in the Minister's opinion, suitable for use for the storage of a regulated substance; and

(b)     a person (the applicant) who is not the holder of the relevant licence seeks access to the natural reservoir for the storage of a regulated substance; and

(c)     the applicant, after making reasonable attempts to do so, fails to reach agreement with the licensee on terms and conditions of access to and use of the natural reservoir, the Minister may, by notice in writing given to the applicant and the holder of the licence, determine terms and conditions (which the Minister considers to be fair and reasonable commercial terms) on which the applicant is to be entitled to access to and use of the reservoir.

(2)     In considering whether to make a determination under this section and, if so, the terms and conditions of the determination, the Minister must have regard to—

(a)     the legitimate business interests of the licensee; and

(b)     the public interest including the public interest in facilitating competition in markets; and

(c)     the interests of persons other than the immediate parties to the determination that might be affected by the determination; and

(d)     the operational requirements for the safe, efficient and reliable use of the natural reservoir; and

(e)     any other matters the Minister considers relevant.

(3)     Before making a determination under this section, the Minister must give the interested parties a reasonable opportunity to comment on the proposed determination.

(4)     A determination under this section is binding on the holder of the licence and the applicant.

(5)     Access may be granted on terms under which the person to whom the right of access is granted is required to take out a licence for the purpose of exercising the right of access arising under the determination.

(6)     A party to a determination under this section may appeal against the determination to the Land and Valuation Court.

(7)     On an appeal under this section—

(a)     the Court may confirm the Minister's determination; or

(b)     the Court may cancel the Minister's determination if satisfied that it is not fair and reasonable that the applicant should have access to the natural reservoir; or

(c)     the Court may vary the terms and conditions of the determination as the Court considers fair and reasonable.

(8)        The Court may make incidental and ancillary orders (including orders for costs).

Division 12—Surrender, suspension or cancellation of licence 89—Surrender

(1)     A licensee may apply to the Minister to surrender the licence or to surrender part of the licence area.

(2)     The Minister may accept the surrender as from a date specified by the Minister in a notice of acceptance of the surrender given to the applicant.

(3)     If the licensee surrenders part of the licence area, the licence continues in relation to the remainder of the licence area subject to any modification of its conditions that the Minister considers appropriate in view of the surrender.

(4)     The Minister may accept a surrender on any one or more of the following conditions:

(a)     that the applicant rehabilitate land affected by activities conducted under the licence;

(b)     that the applicant pay any monetary obligations incurred before the surrender;

(c)     that the applicant provide information that should have been, but has not been, provided before the surrender.

90—Suspension of licence by agreement

The Minister may, by agreement with the licensee, suspend a licence for a specified period.

91—Disciplinary power to suspend or cancel licence

(1) If a licensee fails to comply with this Act or a condition of the licence, the Minister may, by written notice given to the licensee—

(a)     suspend the licence for a specified period or until the Minister terminates the suspension; or

(b)     cancel the licence.

(2) Before the Minister suspends or cancels the licence, the Minister must give the licensee a notice of default—

(a)     specifying the default; and

(b)     stating the action that the Minister proposes to take; and

(c)     if the default is capable of being remedied—allowing the licensee a reasonable opportunity to remedy the default; and

(d)     whether or not the default is capable of being remedied—giving the licensee a reasonable opportunity to show cause why the proposed action should not be taken.

(3) If the notice allows the licensee an opportunity to remedy a default, and the licensee remedies the default to the Minister's satisfaction, the Minister is not to suspend or cancel the licence on the basis of that default.

Environmental protection and impact assessment

Summary

Section 87 of the South Australia P&GE Act requires licensees to carry out regulated activities such as CO2 storage with due care for, among other things:

  1. the health and safety of persons affected by the activities; and
  2. the environment.

 

Section 96 provides that licensees (including holders of exploration licenses and holders of gas storage licenses) must not carry out a regulated activity, such as CO2 storage, unless a statement of environmental objectives is in force for the activity.

 

Statements of environmental objectives must be prepared in accordance with sections 99 and 100, as follows:

  1. for activities classified as low or medium impact, the statement must be prepared on the basis of an environmental impact report, as defined in section 97; and
  2. for activities classified as high impact, the statement must be prepared on the basis of an environmental impact assessment under the Development Act 1993.

 

Once prepared, statements of environmental objectives must be approved by the Minister in accordance with sections 101, 102 and 103, and under section 105 the licensee must comply with the approved statement of environmental objectives.   

 

Under section 106 the Minister must maintain an environmental register containing, among other things, copies of all environmental impact reports, environmental impact assessments and approved statements of environmental objectives. Section 107 requires that the environmental register be available for inspection without fee, and that copies of material on the register be available for purchase. 

 

The Minister and authorised officers also have certain powers to give directions under sections 108 and 109, including directions to take actions to prevent or minimise environmental damage, and to rehabilitate land.

 

Under section 111, licensees are liable to compensate the state of South Australia for the cost of environmental rehabilitation the state is reasonably required to carry out as a result of serious environmental damage, or the threat or potential of serious environmental damage, arising from activities carried out under a licence.  

Article/Section No.

Section 87
Section 95
Section 96
Section 97
Section 98
Section 99
Section 100
Section 101
Section 102
Section 103
Section 104
Section 105
Section 106
Section 107
Section 108
Section 109
Section 110
Section 111

Associated legislation:
Development Act 1993

Instrument Text

87—Activities to be carried out with due care and in accordance with good industry practice

A licensee must carry out regulated activities—

(a)

with due care for—

(i)      the health and safety of persons who may be affected by those activities; and

(ii)     the environment; and

(iii)    where relevant—the need to ensure, in a case where interruption of natural gas supply could cause significant social disruption, that facilities for processing and transporting natural gas are designed, constructed, managed and operated on a prudential basis so as to provide a reliable and adequate supply of natural gas; and

in accordance with good practice as recognised in the relevant industry.

(b) Maximum penalty: $120 000.

[…]

Part 12—Environment protection

Division 1—Objects

Objects

95

 

(1) The object of this Part is to ensure that, in carrying out regulated activities, licensees—

 

(a) ensure that regulated activities that have (actually or potentially) adverse effects on the environment are properly managed to reduce environmental damage as far as reasonably practicable; and

 

(b) eliminate as far as reasonably practicable risk of significant long term environmental damage; and

 

(c) ensure that land adversely affected by regulated activities is properly rehabilitated.

 

(2) The Minister must, in acting under this Part, have regard to, and seek to further, the objects of the Natural Resources Management Act 2004.

 

Division 2—Environmental prerequisites

Pre-conditions of regulated activities

96

 

A licensee must not carry out regulated activities unless a statement of environmental objectives is in force for the relevant activities under this Part.

 

Maximum penalty: $120 000.

 

Division 3—Environmental impact report and classification of regulated activities

Environmental impact report

97

 

(1) An environmental impact report on regulated activities must be prepared in accordance with the regulations.

 

(2) An environmental impact report—

 

(a) must take into account cultural, amenity and other values of Aboriginal and other Australians insofar as those values are relevant to the assessment; and

 

(b) must take into account risks inherent in the regulated activities to the health and safety of the public; and

 

(c) must contain sufficient information to make possible an informed assessment of the likely impact of the activities on the environment.

 

(3) An environmental impact report—

 

(a) may relate to regulated activities generally or a particular class of regulated activities; and

 

(b) may be applicable to the whole of the State or be limited to a particular part of the State.

 

Classification of regulated activities

98

 

(1) After preparation of an environmental impact report, the Minister must classify the activities to which the report relates as—

 

(a) low impact activities; or

 

(b) medium impact activities; or

 

(c) high impact activities.

 

(2) The classification is to be made on the basis of—

 

(a) the environmental impact report; and

 

(b) criteria for the assessment of the environmental impact of regulated activities established under this section.

 

(3) The Minister—

 

(a) must, by notice in the Gazette, establish criteria for the assessment of the environmental impact of regulated activities; or

 

(b) may, by similar notice, revise criteria previously established under this section.

 

(4) In classifying activities that are likely to be recurrent, the Minister must have regard to the cumulative effect of the activities.

 

Division 4—Statements of environmental objectives

Preparation of statement of environmental objectives

99

 

(1) A statement of environmental objectives for regulated activities is to be prepared in accordance with the requirements of the regulations—

 

(a) for low impact or medium impact activities—on the basis of an environmental impact report; or

 

(b) for high impact activities—on the basis of an environmental impact assessment under Part 8 of the Development Act 1993.

 

(2) If the Minister decides that an approved statement of environmental objectives should be revised, a revised statement of environmental objectives is to be prepared in accordance with the requirements of the regulations—

 

(a) if the approved statement relates to low impact or medium impact activities— on the basis of an environmental impact report; or

 

(b) if the approved statement relates to high impact activities—on the basis of an environmental impact assessment under Part 8 of the Development Act 1993.

 

Content of statement of environmental objectives

100

 

(1) A statement of environmental objectives for regulated activities—

 

(a) must state environmental objectives that must be achieved in carrying out regulated activities to which the statement applies; and

 

(b) must state criteria to be applied to determine whether the stated environmental objectives have been achieved in a particular case; and

 

(c) may include conditions and requirements to be complied with in order to achieve the stated objectives; and

 

(d) must impose reporting obligations on a person carrying out regulated activities to which it relates.

 

(2) One of the environmental objectives must be the rehabilitation of land adversely affected by regulated activities.

 

(3) A statement of environmental objectives—

 

(a) may provide for and, for high impact activities, must provide for a report or periodic reports (to be obtained by the Minister at the expense of the licensee) from an independent expert on the environmental consequences of the activities; and

 

(b) may include a system for evaluating the licensee's environmental performance.

 

(4) A statement of environmental objectives—

 

(a) may be generally applicable throughout the State; or

 

(b) may be limited to a specific part of the State.

 

Approval of statement of environmental objectives for low impact activities

101

 

(1) If, after consulting with government agencies as required under the regulations, the Minister is satisfied with a statement of environmental objectives for low impact activities, the Minister may approve the statement.

 

(2) If, after consulting with government agencies as required under the regulations, the Minister is not satisfied with a statement of environmental objectives for low impact activities, the Minister may—

 

(a) amend the statement and approve it in the amended form; or

 

(b) require the preparation of a fresh statement of environmental objectives.

 

Statement of environmental objectives for medium impact activities

102

 

(1) When a statement (or revised statement) of environmental objectives has been prepared for medium impact activities, the Minister must, if satisfied that the statement (or revised statement) is an acceptable basis for public consultation, publish a notice in a newspaper circulating generally throughout the State—

 

(a) stating that the relevant environmental impact report and the proposed statement of environmental objectives may be inspected at a nominated address or a copy may be obtained from that address; and

 

(b) inviting submissions from interested members of the public on the environmental impact report and on the subject matter of the proposed statement (or revised statement) of environmental objectives within a period ending on a date (the closing date for submissions) at least 30 business days after publication of the notice.

 

(2) The Minister may also invite submissions from organisations and persons who have, in the Minister's opinion, a particular interest in the relevant subject matter.

 

(3) Copies of written submissions made in response to an invitation under this section are to be kept available for inspection at the Minister's public office.

 

(4) The Minister—

 

(a) must take into account all submissions made before the relevant closing date for submissions; and

 

(b) may—

 

(i) approve the statement (or revised statement) of environmental objectives without amendment; or

 

(ii) amend the statement (or revised statement) of environmental objectives as the Minister thinks fit; and

 

(c) if appropriate, may amend the environmental impact report.

 

(5) If the statement (or revised statement) of environmental objectives is amended, but not substantially, the Minister may approve it in its amended form but, if it is substantially amended, the Minister must repeat the process of public consultation until it is approved without substantial amendment.

 

Statement of environmental objectives for high impact activities

103

 

If the Minister is satisfied that a statement (or revised statement) of environmental objectives for high impact activities properly reflects the relevant environmental impact assessment under Part 8 of the Development Act 1993, the Minister may approve the statement (or revised statement).

 

Specially protected areas

103A

 

(1) If a statement (or revised statement) of environmental objectives applies to a specially protected area or the Murray-Darling Basin, the Minister must not approve the statement (or revised statement) without the concurrence of the relevant Minister.

 

(2) If the Minister to whom the administration of this Act is committed and the relevant Minister cannot reach agreement, the Ministers must take steps to refer the matter to the Governor and the Governor will determine the matter (and any decision taken by the Governor will be taken to be a decision of the Minister under this Act).

 

Commencement of statement of environmental objectives

104

 

(1) When the Minister approves a statement (or a revised statement) of environmental objectives, the Minister must have notice of the approval published in the Gazette.

 

(2) The statement (or revised statement) of environmental objectives comes into force when notice of its approval is published in the Gazette or on a later date stated in the notice of approval.

 

(3) When a revised statement of environmental objectives comes into force it supersedes the previous statement of environmental objectives for the relevant regulated activities.

 

Enforcement of requirements etc of statement of environmental objectives

105

 

(1) It is mandatory condition of every licence that the licensee must comply with an approved statement of environmental objectives relevant to activities carried out under the licence.

 

(2) However, a breach of the condition cannot be a ground for suspending or cancelling the licence or imposing any penalty on the licensee if—

 

(a) it is not a serious incident within the meaning of section 85; and

 

(b) the licensee immediately after becoming aware of the breach takes all reasonable steps to remedy the situation.

 

(3) If a statement of environmental objectives includes a system for evaluating the licensee's environmental performance, and the evaluation indicates poor environmental performance in terms of the criteria of evaluation, the Minister may, by

written notice to the licensee, impose prohibitions or restrictions on the licensee engaging in regulated activities.

 

(4) A licensee must not contravene a prohibition or restriction imposed under subsection (3).

 

Maximum penalty: $120 000.

 

Division 5—The environmental register

Environmental register

106

 

(1) The Minister must maintain an environmental register.

 

(2) The register must contain—

 

(a) a copy of every environmental impact report prepared for the purposes of this Act; and

 

(b) a copy of the current criteria for the classification of regulated activities; and

 

(c) a copy of every classification of regulated activities made by the Minister under this Part; and

 

(d) a copy of every current statement (or revised statement) of environmental objectives approved under this Act and a copy of the environmental impact report on which the statement is based; and

 

(e) a copy of every environmental impact assessment affecting regulated activities under the Development Act 1993; and

 

(f) a copy of every report provided under reporting obligations imposed by a statement of environmental objectives.

 

Environmental register to be available for inspection

107

 

(1) The environmental register is to be available for inspection, without fee, during ordinary office hours at a public office, or public offices, determined by the Minister.

 

(2) The Minister must ensure that copies of material on the environmental register can be purchased for a reasonable fee at the public office, or public offices, at which the register is kept available for inspection.

 

(3) The Minister must ensure that the environmental register can be inspected at the

department's website.

 

Division 6—General provisions for environmental protection

Power to direct licensee to take action to prevent or minimize environmental damage

108

 

(1) If, in the Minister's opinion, authorised activities are being conducted in a way that results in undue damage to the environment, the Minister may, by written notice given to the licensee (an environmental direction), direct the licensee to take specified action to prevent or minimise environmental damage.

 

(2) If, in the opinion of an authorised officer, authorised activities are being conducted in a way that results in undue damage to the environment and it is urgently necessary to take action to prevent or minimise environmental damage, the authorised officer may, by written notice given to the licensee (an environmental direction), direct the licensee to take specified action to prevent or minimize environmental damage.

 

(3) A direction under this section must allow a reasonable time for compliance with the direction.

 

(4) A licensee must comply with a direction under this section within the time allowed in the direction.

 

Maximum penalty: $120 000.

 

(5) If a direction is given under this section, the Minister must review the adequacy of the relevant statement of environmental objectives and, if it appears on the review that a revised statement of environmental objectives is necessary to prevent continuation or recurrence of undue damage to the environment, the Minister must take the necessary steps to have a revised statement of environmental objectives for the relevant activities prepared and brought into force.

 

Power to direct rehabilitation of land

109

 

(1) The Minister may, by written notice given to a licensee or former licensee (an environmental direction), direct the licensee or former licensee—

 

(a) to take specified action to rehabilitate land adversely affected by regulated activities; or

 

(b) to take action necessary to rehabilitate the land to a standard specified in the direction.

 

(2) A direction under this section—

 

(a) must allow a reasonable time for compliance with the direction; and

 

(b) may require the removal of abandoned equipment and facilities.

 

(3) A person must comply with a direction under this section within the time allowed in the direction.

 

Maximum penalty: $120 000.

 

Application for review of environmental direction

110

 

(1) The licensee or former licensee required to comply with an environmental direction may apply to the ERD Court for a review of the direction within 14 days after receiving the direction.

 

(2) Unless the Court decides to the contrary, an application for review of an environmental direction does not suspend operation of the direction.

 

(3) On review of an environmental direction, the ERD Court may—

 

(a) confirm the direction (with or without modification); or

 

(b) revoke the direction.

 

Liability for damage caused by authorised activities

111

 

(1) A licensee (or former licensee) is liable to compensate the State for the cost of environmental rehabilitation the State is reasonably required to carry out as a result of serious environmental damage, or the threat or potential of serious environmental damage (insofar as this may be reasonably assessed), arising from activities carried

out under the licence.

 

(2) If a licensee provides the Minister with a report, made by an independent expert acceptable to the Minister, containing an assessment of the risk inherent in regulated activities, and of the precautions necessary to eliminate or minimise the risk, the Minister may enter into an agreement with the licensee under which—

 

(a) the licensee is obliged to take specified precautions to eliminate or minimize the risk; and

 

(b) the licensee's liability under this section is limited or excluded.

 

(3) The Minister may recover compensation on behalf of the State under this section in a court having jurisdiction in cases of tort up to the amount claimed.

Permitting CO2 injection and storage

Summary

The definition of “regulated activities” given in section 10 of the South Australia P&GE Act includes utilisation of a natural gas reservoir to store CO2 (a “regulated substance” under section 4), including in cases where a trace element naturally occurs with the CO2.

 

Section 11 prohibits engagement in a regulated activity, such as utilisation of a natural gas reservoir to store CO2, unless the activity is authorised under the Act.

 

The Minister can grant a gas storage licence under Part 6 of the Act, authorising the licensee, subject to the licence terms, to carry out operations for the use of a natural reservoir for CO2 storage.

 

The following conditions, among others, must exist for a person to be entitled to the grant of a gas storage licence under section 35:

  1. a natural reservoir (a “regulated resource” under section 4) must exist in the area for which the licence is sought;
  2. the applicant must hold, at the time of the application, an exploration licence, retention licence or mining tenement under the Mining Act 1971 over the area for which the gas storage licence is to be granted; and
  3. storage must be currently commercially feasible, or be more likely than not to become commercially feasible within the next twenty four months.

 

The Minister may call for tenders for gas storage licenses over areas for which no person is currently entitled to the grant of such a licence, provided that the Minister is satisfied that a natural reservoir exists in the relevant area and that storage is currently commercially feasible, or is more likely than not to become commercially feasible within the next twenty four months (see section 35(3)).

 

Under section 36, the Minister may give written notice to the holder of an exploration licence or retention licence stating that, in the Minister’s opinion, CO2 storage is currently commercially feasible within all or part of the licence area, and that the licence holder should apply for a gas storage licence. If the licence holder does not comply within the time required (which must be at least six months), the Minister may:

  1. excise the relevant area from the exploration or retention licence;
  2. call for tenders for a gas storage licence over this area; and
  3. grant such a licence to the successful tenderer.

 

If a natural reservoir suitable for gas storage extends beyond the area of a gas storage licence, and the adjacent area is covered by an exploration, retention or gas storage licence held by another person, the Minister may require the respective licence holders under section 42 to negotiate with a view to using the relevant areas as a single unit. If the holders fail to agree on this within a reasonable time, the Minister may establish such a scheme, by which the holders will then be bound.

 

In addition to gas storage licenses, Part 9 of the Act provides for the granting of associated activities licenses, to authorise anything reasonably necessary for, or incidental to, the carrying on of regulated activities in the area or vicinity of the gas storage licence area.

 

Part 11 of the Act sets out a range of general provisions applying to licenses which include, among others, provisions relating to:

  1. compatibility between petroleum, geothermal energy and gas storage licenses, and the circumstances where such two licenses may apply simulataneously to the same area (see Division 2);
  2. conditions to which licenses under the Act are subject, e.g. in relation to information and records, compliance with environmental obligations and additional discretionary conditions (see Division 3);
  3. annual fees payable be licensees (see Division 4); and
  4. third party access to natural reservoirs in the licence area (see Division 5).  

 

Although gas storage licenses are normally granted for an unlimited term (see section 40), they may be:

  1. cancelled or converted to a retention licence under section 41, if commercial activities have not been carried on within the licence area for twenty four months or more;
  2. surrendered under section 89;
  3. suspended by agreement under section 90; or
  4. suspended or cancelled for disciplinary purposes under section 91.

Article/Section No.

Section 74
Section 75
Section 76
Section 77
Section 78
Section 79
Section 89
Section 90
Section 91

Associated legislation:
Mining Act 1971

Instrument Text

Part 3 - Licensing regulated activities

Division 1 - Requirement for licence

Regulated activities

10

 

(1) The following are regulated activities:

 

(a) exploration for petroleum or another regulated resource; or

 

(b) operations to establish the nature and extent of a discovery of petroleum or another regulated resource, and to establish the commercial feasibility of production and the appropriate production techniques; or

 

(c) production of petroleum or another regulated substance; or

 

(d) utilisation of a natural reservoir to store petroleum or another regulated substance (including in a case where a trace element naturally occurs with the petroleum or other regulated substance); or

 

(e) production of geothermal energy; or

 

(f) construction of a transmission pipeline for carrying petroleum or another regulated substance; or

 

(g) operation of a transmission pipeline for carrying petroleum or another regulated substance.

 

(2) However, exploratory operations conducted at a height of 500m or more above the surface of the ground are not regulated activities.

 

(3) A reference to a regulated activity includes all operations and activities reasonably necessary for, or incidental to, that activity such as (for example)—

 

(a) physical and geophysical surveys of land;

 

(b) the drilling of wells;

 

(c) the injection of water or some other substance into a natural reservoir in order to enhance production of petroleum or another regulated substance;

 

(d) forcing water or some other substance through a source of geothermal energy in order to absorb thermal energy and enable its recovery or utilisation at the surface;

 

(e) the processing of substances recovered from a well;

 

(f) the construction of borrow pits;

 

(g) the installation and operation of plant and equipment;

 

(h) the use of a natural reservoir to store a regulated substance;

 

(i) water disposal;

 

(j) the construction of roads, camps, airports, buildings and other infrastructure.

 

Requirement for licence

11

 

A person must not engage in a regulated activity unless the activity is authorised under this Act.

Maximum penalty: $120 000.

 

Division 2—Grant of licence

General authority to grant licence

12

 

(1) The Minister may, subject to this Act, grant a licence.

 

(2) If an application for the grant or renewal of a licence relates to an area within or adjacent to a specially protected area, the Minister must, before making his or her decision on the application, refer the application to the relevant Minister and consult

with the relevant Minister in relation to the matter.

 

(3) If an application for the grant or renewal of a licence is referred to a relevant Minister and the Minister to whom the administration of this Act is committed and the relevant Minister cannot agree—

 

(a) on whether a licence should be granted or renewed; or

 

(b) if a licence is granted or renewed, on the conditions to which the licence should be subject,

 

the Ministers must take steps to refer the matter to the Governor and the Governor will determine the matter (and any decision taken by the Governor will be taken to be a decision of the Minister under this Act).

 

Licence classes

13

 

Licenses are of the following classes:

 

(a) preliminary survey licence; and

 

(b) speculative survey licence; and

 

(c) exploration licence (with 3 categories of licence under this Act); and

 

(d) retention licence (with 3 categories of licence under this Act); and

 

(e) production licence (with 3 categories of licence under this Act); and

 

(f) pipeline licence; and

 

(g) associated activities licence; and

 

(h) special facilities licence.

 

Licence is not personal property for the purposes of Commonwealth Act

13A

 

A licence is not personal property for the purposes of the Personal Property Securities Act 2009 of the Commonwealth.

 

[…]

 

Part 6—Production

Production licenses

34

 

(1) There will be 3 categories of production licence:

 

(a) a petroleum production licence;

 

(b) a geothermal production licence;

 

(c) a gas storage licence.

 

(2) A petroleum production licence authorises, subject to its terms—

 

(a) operations for the recovery of petroleum or some other regulated substance from the ground including—

 

(i) operations involving the injection of petroleum or another substance into a natural reservoir for the recovery (or enhanced recovery) of petroleum or another regulated substance; and

 

(ii) if the licence so provides—the extraction of petroleum or another regulated substance by an artificial means such as in situ gasification or the techniques used to recover coal seam methane;

 

(b) operations for the processing of regulated substances;

 

(c) operations for the storage or withdrawal of petroleum or some other regulated substance for the prudent supply or delivery of the petroleum or other regulated substance to the market.

 

(3) A geothermal production licence authorises, subject to its terms, operations for the extraction or release of geothermal energy.

 

(4) A gas storage licence authorises, subject to its terms, operations for the use of a natural reservoir for the storage of petroleum or some other regulated substance.

 

(5) A production licence also authorises (subject to its terms) the licensee to carry out other regulated activities within the licence area.

 

Grant of production licence

35

 

(1) Subject to this Act, a person is, on application, entitled to the grant of a production licence for the production of a regulated resource of a particular kind if—

 

(a) a regulated resource exists in the area for which the production licence is to be granted; and

 

(b) the person holds, or held at the time of the application for the production licence—

 

(i) an exploration licence or a retention licence over the area for which the production licence is to be granted; or

 

(ii) a mining tenement under the Mining Act 1971 over the area for which the production licence is to be granted; and

 

(c) —

 

(i) in a case where paragraph (b)(i) applies—the exploration licence authorised exploration for a regulated resource of the relevant kind or the retention licence was granted for a regulated resource of the relevant kind;

 

(ii) in a case where paragraph (b)(ii) applies—the mining tenement authorised operations for exploration for or the recovery of coal and the production licence is to be granted for in situ gasification or coal seam methane production (and other related activities as the Minister considers appropriate); and

 

(d) production is currently commercially feasible or is more likely than not to become commercially feasible within the next 24 months.

 

(2) If the holder of an exploration or retention licence is in default under the terms of the licence, the Minister may decline to grant a production licence until the default is remedied.

 

(3) If—

 

(a) the Minister is satisfied that—

 

(i) a regulated resource exists in a particular area; and

 

(ii) production is currently commercially feasible or is more likely than not to become commercially feasible within the next 24 months; but

 

(b) there is no person who is currently entitled to the grant of a production licence under subsection (1), the Minister may call for tenders for the grant of a production licence and grant a production licence to the applicant who submits the successful tender.

 

(4) Subsections (1)(b) and (c) do not apply if the application is for a gas storage licence.

 

Power to require holder of exploration licence or retention licence to apply for production licence

36

 

(1) The Minister may, after consultation with the holder of an exploration licence or a retention licence, give a written notice to the holder stating that—

 

(a) production of a regulated resource is, in the Minister's opinion, currently commercially feasible within the whole or a specified part of the licence area; and

 

(b) the holder of the licence should apply for a production licence of the relevant category for the relevant area within a period (which must be at least 6 months) stated in the notice.

 

(2) If the holder of the licence does not apply for a production licence for the relevant area within the time stipulated in the notice, the Minister may—

 

(a) excise the relevant area from the exploration or retention licence; and

 

(b) call for tenders for the grant a production licence for the relevant area; and

 

(c) grant a production licence to the applicant who submits the successful tender.

 

Area of production licence

37

 

(1) The area of a petroleum production licence must not exceed either of the following limits:

 

(a) twice the area under which (according to a reasonable estimate at the time of granting the licence) the discovery is more likely than not to extend;

 

(b) 100 km2.

 

(2) The area of a geothermal production licence or gas storage licence must not exceed 1 000 km2.

 

Work program to be carried out by production licensee

38

 

(1) A production licence may include a condition requiring the licensee to carry out work—

 

(a) for the development of the licence area; and

 

(b) for the production of regulated resources, in accordance with a work program approved by the Minister.

 

(2) If a production licence includes such a condition, a proposed work program must be submitted for the Minister's approval from time to time as required under the relevant licence condition.

 

(3) The Minister may approve a proposed work program with or without addition or variation.

 

(4) The Minister may, on application by the licensee, vary an approved work program.

 

(5) However, Ministerial approval is not required for the acceleration of the work to be carried out under an approved work program.

 

Requirement to proceed with production

39

 

(1) The holder of a production licence must, subject to this Act, proceed with operations for production of the relevant regulated resources—

 

(a) with due diligence; and

 

(b) in accordance with the conditions of the licence.

 

Maximum penalty: $60 000.

 

(2) If operations for production of the relevant regulated resource have not commenced within 24 months after the grant of the production licence, the Minister may, by written notice given to the holder of the licence, require the holder of the licence to

commence the operations.

 

(3) If, in the Minister's opinion, production from the area of a production licence is practicable and commercially feasible, the Minister may, by written notice given to the licensee, require the licensee to undertake or continue operations in accordance with requirements specified in the notice until the licensee satisfies the Minister that the operations are no longer practicable or commercially feasible.

 

(4) A notice under subsection (3) may require production from the area comprised in a production licence at a rate that is no less than a rate specified in the notice.

 

Term of production licence

40

 

A production licence is to be granted for an unlimited term.

 

Cancellation or conversion of production licence where commercial operations in abeyance

41

 

(1) If operations resulting in production from the licence area on a commercial basis have not been carried on within the area of a production licence for 24 months or more (and the licensee has not entered into arrangements, satisfactory to the Minister, for commencing or resuming such operations at a reasonable future time), the Minister may, by written notice to the licensee—

 

(a) convert the licence into a retention licence; or

 

(b) cancel the licence.

 

(2) Before cancelling a licence under this section, the Minister must give the licensee a reasonable opportunity to make representations about the proposed action.

 

42—Unitisation of production

 

(1) If the Minister is satisfied that—

 

(a) a natural reservoir containing, or suitable for storage of, a regulated substance extends beyond the area of a production licence; and

 

(b) the adjacent area is covered by an exploration, retention or production licence held by a different person, the Minister may, by written notice given to the holders of the respective licenses, require them to enter into negotiations with a view to stablishing a scheme for working or using the relevant areas as a single unit.

 

(2) If the holders of the licenses fail to reach agreement on the terms of such a scheme within a reasonable time, the Minister may, by written notice given to the licensees, establish such a scheme.

 

(3) Before the Minister establishes a scheme under this section, the Minister must allow the holders of the licenses affected by the scheme a reasonable opportunity to make submissions on the terms of the scheme.

 

(4) A scheme under this section is binding on the holders, for the time being, of the licenses affected by the scheme.

 

[…]

 

Part 9—Associated activities

Associated activities licence

56

 

(1) An associated activities licence—

 

(a) authorises the holder of the licence (the primary licence)—

 

(i) to establish and operate associated facilities on land outside the area of the primary licence;

 

(ii) without limiting subparagraph (i), to carry out any type of associated regulated activity on land outside the area of the primary licence;

 

(b) for that purpose, confers rights of access to and use of land to which the licence relates on terms and conditions specified in the licence.

 

(2) An associated facility or an associated regulated activity is anything that is reasonably necessary for, or incidental to, carrying on regulated activities in the area of the primary licence, or in the vicinity of the area of the primary licence.

 

(3) For example—

 

(a) an associated activities licence might be granted to the holder of an exploration licence, a retention licence or a production licence authorising the holder of the licence to drill a well from an area outside the area of the primary licence for obtaining access to geological structures within the area of the primary licence;

 

(b) an associated activities licence might be granted authorising the holder of the licence to establish and operate facilities within the licence area such as—

 

(i) a pipeline;

 

(ii) a processing plant;

 

(iii) a camp, airport, building or other infrastructure;

 

(iv) commercial or recreational facilities for people involved in regulated activities.

 

Area of associated activities licence

57

 

(1) An associated activities licence cannot be granted for an area exceeding—

 

(a) in a case involving facilities or activities that, in the opinion of the Minister, are permanent (or effectively permanent)—5 km2;

 

(b) in any other case—1 500 km2.

 

(2) However, these restrictions on the area of a licence do not apply if the licence area is in the form of a corridor with a width of 50m or less.

 

Term of associated activities licence

58

 

(1) Subject to subsection (2), an associated activities licence is an adjunct to the primary

licence and is, subject to its terms, granted for the same term, and renewable at the

same time and in the same way as the primary licence.

 

(2) An associated activities licence for activities that, in the opinion of the Minister, are temporary in nature will be granted for a term determined by the Minister (which may be a term that takes into account any decommissioning, rehabilitation or other action that may be required at the conclusion of the activities and which may be renewed

from time to time as the Minister thinks fit).

 

Relationship with other licenses

59

 

(1) An associated activities licence may be granted in respect of an area comprised within the area of another licence.

 

(2) Subject to any relevant licence conditions, the rights conferred by an associated activities licence prevail over rights conferred by another licence in respect of the same area.

 

(3) Before the Minister grants an associated activities licence for an area covered by another licence—

 

(a) the Minister must have regard to—

 

(i) the reasons put forward by the applicant for the grant of the licence and, in particular, whether they justify the grant of the licence in derogation from the rights of the existing licensee; and

 

(ii) the legitimate business interests of the existing licensee; and

 

(iii) the effect of the operations to be carried out under the associated activities licence on the operations conducted under the existing licence; and

 

(iv) the operational and technical requirements for the safe, efficient and reliable conduct of operations under both licenses; and

 

(v) any other matters the Minister considers relevant; and

 

(b) the Minister must consult with the existing licensee about the matters referred to in paragraph (a) and about the conditions to be included in the licence.

 

(4) If an associated activities licence is granted over the area of another licence, the holder of the other licence is to be entitled to compensation for diminution of the rights conferred by that licence—

 

(a) to be agreed between the licensees; or

 

(b) in default of agreement, to be determined by the relevant court.

 

(5) If an associated activities licence is granted over the area of another licence, the Land and Valuation Court may, on application by the holder of the other licence made within 2 months after the grant of the associated activities licence, review the terms and conditions of the associated activities licence and vary them as the Court considers just.

 

(6) The Land and Valuation Court may, in exercising its powers under subsection (5), relocate the area of the associated activities licence or vary the area in some other way.

 

Part 11—General provisions about licenses

Division 1—General provision about applications

Application for licence

65

 

(1) An application for a licence—

 

(a) must be made in an approved form; and

 

(b) if the licence is to contain a mandatory condition requiring the licensee to carry out work in accordance with an approved work program—must be accompanied by a proposed work program for the first term of the licence; and

 

(c) must be accompanied by a statement of the financial and technical resources available to the applicant; and

 

(d) must contain other information required in the approved form; and

 

(e) must be accompanied by the fee prescribed by the regulations.

 

(1a) If an application for an exploration licence is made in accordance with this Act (the relevant application), the relevant application will, for the purposes associated with its consideration and any grant of an exploration licence on the basis of the application, rank ahead of any other application for an exploration licence for an overlapping area received by the Minister after the time that the Minister received the relevant application.

 

(1b) Subsection (1a) does not apply if the application is in response to a call for tenders under section 22.

 

(1c) A ranking established under subsection (1a) will cease to apply if the Minister cancels the ranking on the ground—

 

(a) that the applicant has failed to comply with a requirement under this Act (in accordance with any relevant time requirement); or

 

(b) that the application is found to be invalid; or

 

(c) that there is some other default, defect or circumstances that the Minister considers is sufficiently significant to warrant the cancellation of the ranking.

 

(2) An application for the renewal of a licence—

 

(a) must be made to the Minister in an approved form at least 2 months before the end of the licence term preceding the proposed renewal; and

 

(b) must contain other information required by the Minister; and

 

(c) if the licence contains a mandatory condition requiring the licensee to carry out work in accordance with an approved work program—must be accompanied by a proposed work program for the term of the renewal; and

 

(d) must be accompanied by the fee prescribed by the regulations.

 

(3) The Minister may require an applicant for the grant or renewal of a licence to provide any further information, documents or materials to assist in assessing and determining the application.

 

(4) If an applicant fails to comply with a requirement under subsection (3) within a reasonable time allowed by the Minister (which must be at least 30 days), the application lapses.

 

(5) If an application for the renewal of a licence is made before the end of the term of the licence, the licence term is extended until the application is determined.

 

(6) Notice of an application for the grant of a production licence, and notice of an application for the grant or renewal of a pipeline licence, associated activities licence or special facilities licence, must be published in the Gazette in accordance with a determination of the Minister before the application is determined.

 

Preconditions of grant or renewal of licence

66

 

(1) The Minister may offer a licence to a particular applicant on condition that—

 

(a) the applicant is to return the executed licence to the Minister within a specified period; and

 

(b) if the applicant fails to do so—the offer lapses and the licence may be offered to someone else.

 

(2) As a condition of granting or renewing a licence, the Minister may require the applicant to give security, of a kind and amount acceptable to the Minister, for the satisfaction of obligations arising under this Act or the licence.

 

Division 2—Extent of licence exclusivity

Application of Division

67

 

This Division applies to licenses of the following classes:

 

(a) exploration licence;

 

(b) retention licence;

 

(c) production licence.

 

Extent to which same area may be subject to different licenses

68

 

(1) A licence to which this Division applies is compatible with another licence to which this Division applies if—

 

(a) 1 relates to a source of geothermal energy and the other does not; or

 

(b) 1 relates to gas storage and the other does not.

(3) The same area cannot be simultaneously subject to two or more licenses to which this Division applies unless the licenses are compatible.

 

(4) For the purposes of this section, if a person who is entitled to the grant of a licence to which this Division applies makes an application for such a licence, the area to which the application relates is to be taken to be subject to a licence to which this Division applies until the application is determined.

 

(5) This section does not derogate from the operation of Division 5.

 

Grant of compatible licence to area already under licence

69

 

(1) Before the Minister grants a compatible licence in respect of an area that is already wholly or partly subject to a licence to which this Division applies, the Minister must consult with the existing licensee (unless the existing licensee is the person seeking

the compatible licence).

 

(2) The Minister must, in acting under subsection (1), seek to consult on—

 

(a) the reasons put forward by the applicant for the grant of the relevant licence; and

 

(b) the legitimate business interests of the holder of the existing licence; and

 

(c) the effect of the operations to be carried out under the proposed licence on the operations carried out under the existing licence; and

 

(d) the operational and technical requirements for the safe, efficient and reliable conduct of operations under both licenses, (and the Minister may consult on such other matters as the Minister considers

relevant).

 

Interrelationship between rights of licensees under compatible licenses

70

 

If a licensee discovers a regulated resource in an area subject to two or more compatible licenses, the rights under this Act in respect of the discovery attach to the licensee who holds a licence for a regulated resource of the relevant kind irrespective

of whether that licensee actually made the discovery.

 

Excision of licence areas

71

 

If—

 

(a) a retention licence is granted to the holder of an exploration licence or a production licence in respect of part only of the area comprised in the earlier licence; or

 

(b) a production licence is granted to the holder of an exploration licence or a production licence in respect of part only of the area comprised in the earlier licence, the area of the new licence is excised from the area of the earlier licence.

 

Division 3—Licence conditions

Mandatory conditions

72

 

A licence must include the conditions designated in this Act as mandatory conditions.

 

Mandatory condition as to use of information etc

73

 

It is a mandatory condition of every licence that the licensee authorises the Minister—

 

(a) to make use of information and records provided by the licensee under this Act; and

 

(b) to disclose information and records provided by the licensee under this Act as authorised by the regulations.

 

Classification of activities to be conducted under licence

74

 

(1) A licence is to include mandatory conditions dividing the regulated activities to be carried out under the licence into—

 

(a) activities requiring high level official surveillance; or

 

(b) activities requiring low level official surveillance.

 

(2) The activities are to be classified as requiring high level official surveillance unless the licensee satisfies the Minister that, in view of the licensee's demonstrated competence to comply with the requirements of this Act and the conditions of the licence, the activities should be classified as requiring low level official surveillance.

 

(3) The mandatory conditions are to provide as follows:

 

(a) the Minister's prior written approval is required for activities requiring high level official surveillance; and

 

(b) notice of activities requiring low level official surveillance is to be given as required in the conditions or by regulation.

 

(4) The Minister may, by written notice to a licensee, change the classification of activities under the relevant licence conditions.

 

(5) If regulated activities to be conducted under a licence are generally or substantially classified as requiring a low level of official surveillance, the annual licence fee payable for the licence will be reduced by an amount not exceeding 50% of the fee according to a determination of the Minister as to the level of official surveillance required under the licence.

 

Mandatory condition about resources required for compliance with environmental obligations

75

 

It is a mandatory condition of every licence that the licensee must have adequate technical and financial resources to ensure compliance with the licensee's

environmental obligations (including the rehabilitation of land adversely affected by regulated activities carried out under the licence).

 

Discretionary conditions

76

 

(1) A licence may be granted on other conditions (discretionary conditions) the Minister considers appropriate.

 

(2) The discretionary conditions of the licence may (for example) include a condition requiring the licensee to maintain insurance on terms and conditions approved by the Minister insuring the licensee and the State against obligations arising from regulated activities under the licence.

 

(3) The Minister may add a discretionary condition to a licence, or vary or revoke a discretionary condition of a licence—

 

(a) on the renewal of the licence; or

 

(b) at any other time with the agreement of the licensee.

 

Suspension of conditions of licence by agreement

76A

 

(1) The Minister may, by agreement with the licensee, suspend, either for a specified period or indefinitely, any of the conditions attached to a licence (including a mandatory condition).

 

(2) The Minister may, as or when the Minister thinks fit, terminate a suspension under subsection (1).

 

(3) If a suspension is put in place under subsection (1), the Minister may, if relevant, by the instrument of suspension or by a later instrument furnished to the licensee, extend the period of the licence by a period not exceeding the period of the suspension.

 

Non-compliance with licence conditions

77

 

If a licence condition is not complied with, the licensee is guilty of an offence.

 

Maximum penalty: $120 000.

 

Division 4—Annual fees

Annual fees

78

 

(1) A licensee must pay to the Minister annually and in advance a fee appropriate to the relevant licence fixed by, or calculated in accordance with, the prescribed scale.

 

(2) If a licensee fails to pay a fee in accordance with subsection (1)—

 

(a) the amount in arrears will, unless the Minister determines otherwise, be increased by penalty interest at the prescribed rate; and

 

(b) the Minister may impose on the licensee a fine of an amount fixed by the Minister up to a limit of $1,000 or 10% of the outstanding fee, whichever is the greater.

 

(3) The Minister may for any proper reason remit penalty interest or a fine imposed under subsection (2) wholly or in part.

 

(4) A fee (and any penalty interest or fine imposed by the Minister under this section) may be recovered as a debt due to the Crown.

 

Division 5—Reservoir access

Access to natural reservoir

79

 

(1) If—

 

(a) there is a natural reservoir in the area of a licence that is, in the Minister's opinion, suitable for use for the storage of a regulated substance; and

 

(b) a person (the applicant) who is not the holder of the relevant licence seeks access to the natural reservoir for the storage of a regulated substance; and

 

(c) the applicant, after making reasonable attempts to do so, fails to reach agreement with the licensee on terms and conditions of access to and use of the natural reservoir,

 

the Minister may, by notice in writing given to the applicant and the holder of the licence, determine terms and conditions (which the Minister considers to be fair and reasonable commercial terms) on which the applicant is to be entitled to access to and

use of the reservoir.

 

(2) In considering whether to make a determination under this section and, if so, the terms and conditions of the determination, the Minister must have regard to—

 

(a) the legitimate business interests of the licensee; and

 

(b) the public interest including the public interest in facilitating competition in markets; and

 

(c) the interests of persons other than the immediate parties to the determination that might be affected by the determination; and

 

(d) the operational requirements for the safe, efficient and reliable use of the natural reservoir; and

 

(e) any other matters the Minister considers relevant.

 

(3) Before making a determination under this section, the Minister must give the interested parties a reasonable opportunity to comment on the proposed determination.

 

(4) A determination under this section is binding on the holder of the licence and the applicant.

(5) Access may be granted on terms under which the person to whom the right of access is granted is required to take out a licence for the purpose of exercising the right of access arising under the determination.

 

(6) A party to a determination under this section may appeal against the determination to the Land and Valuation Court.

 

(7) On an appeal under this section—

 

(a) the Court may confirm the Minister's determination; or

 

(b) the Court may cancel the Minister's determination if satisfied that it is not fair and reasonable that the applicant should have access to the natural reservoir; or

 

(c) the Court may vary the terms and conditions of the determination as the Court considers fair and reasonable.

 

(8) The Court may make incidental and ancillary orders (including orders for costs).

 

[…]

 

Division 12—Surrender, suspension or cancellation of licence

Surrender

89

 

(1) A licensee may apply to the Minister to surrender the licence or to surrender part of the licence area.

 

(2) The Minister may accept the surrender as from a date specified by the Minister in a notice of acceptance of the surrender given to the applicant.

 

(3) If the licensee surrenders part of the licence area, the licence continues in relation to the remainder of the licence area subject to any modification of its conditions that the Minister considers appropriate in view of the surrender.

 

(4) The Minister may accept a surrender on any one or more of the following conditions:

 

(a) that the applicant rehabilitate land affected by activities conducted under the licence;

 

(b) that the applicant pay any monetary obligations incurred before the surrender;

 

(c) that the applicant provide information that should have been, but has not been, provided before the surrender.

 

Suspension of licence by agreement

90

 

The Minister may, by agreement with the licensee, suspend a licence for a specified period.

 

Disciplinary power to suspend or cancel licence

91

 

(1) If a licensee fails to comply with this Act or a condition of the licence, the Minister may, by written notice given to the licensee—

 

(a) suspend the licence for a specified period or until the Minister terminates the suspension; or

 

(b) cancel the licence.

 

(2) Before the Minister suspends or cancels the licence, the Minister must give the licensee a notice of default—

 

(a) specifying the default; and

 

(b) stating the action that the Minister proposes to take; and

 

(c) if the default is capable of being remedied—allowing the licensee a reasonable opportunity to remedy the default; and

 

(d) whether or not the default is capable of being remedied—giving the licensee a reasonable opportunity to show cause why the proposed action should not be taken.

 

(3) If the notice allows the licensee an opportunity to remedy a default, and the licensee remedies the default to the Minister's satisfaction, the Minister is not to suspend or cancel the licence on the basis of that default.

IV. Operating and closing storage facilities
Monitoring, reporting and verification

Summary

Section 84 of the South Australia P&GE Act requires licensees (including holders of exploration licenses and holders of gas storage licenses) to maintain a range of records, including:

  1. records of all regulated activities carried out under the relevant licence, including the results of such activities;
  2. records of internal and external compliance audits; and
  3. other records as required by the regulations.

 

Copies of such records must be provided to the Minister as required by the Minister or the regulations.

 

Section 85 requires the reporting to the Minister of “serious incidents” and “reportable incidents”, each as defined in section 85.

 

Section 86 imposes additional obligations to report information required under the regulations or by ministerial request. 

Article/Section No.

Section 84
Section 85
Section 86

Instrument Text

84—Records to be kept by licensee

(1)     A licensee must maintain—

(a)     a record of all regulated activities carried out under the licence including, where appropriate, maps and plans; and

(b)     a record of the results of regulated activities carried out under the licence, including the results of the analysis of geological samples; and

(c)     a record of compliance audits by internal or external auditors required under the regulations; and

(d)     other records as required by the regulations. Administrative penalty.

(2)     The licensee must provide the Minister with a copy of the records kept under this section at the times required by the regulations or by the Minister by written notice given to the licensee.

Administrative penalty.

85—Reporting of certain incidents

(1)     In this section—

serious incident means an incident arising from activities conducted under a licence in which—

(a)     a person is seriously injured or killed; or

(b)     an imminent risk to public health or safety arises; or

(c)     serious environmental damage occurs or an imminent risk of serious environmental damage arises; or

(d)     security of natural gas supply is prejudiced or an imminent risk of prejudice to security of natural gas supply arises; or

(e)     some other event or circumstance occurs or arises that results in the incident falling within a classification of serious incidents under the regulations or a relevant statement of environmental objectives.

reportable incident means an incident (other than a serious incident) arising from activities conducted under a licence classified under the regulations as a reportable incident.

(2)     A licensee must report a serious incident to the Minister as soon as practicable after its occurrence and must provide the Minister with a written report on the incident as required under the regulations.

Administrative penalty.

(3)     A licensee must report a reportable incident to the Minister as required under the regulations.

Administrative penalty.

86—Information to be provided by licensee

(1)     A licensee must, as required under the regulations, provide the Minister with information required by the regulations.

Administrative penalty.

(2)     A licensee must provide the Minister with any other information reasonably requested by the Minister within the time specified in the request.

Administrative penalty.

(3)     If the Minister considers the provision of the information requested under subsection (2) essential in the public interest, and gives an intimation to that effect in the request, non-compliance with the request is a summary offence punishable on conviction by a fine not exceeding $120,000.

(4)     A licensee must, if requested to do so by the Minister, provide the Minister with an expert report, within the time specified in the request, verifying information provided to the Minister by the licensee.

Administrative penalty.

(5)     A request under subsection (4) must either nominate the person by whom the expert report is to be prepared or state the nature of the qualifications and experience that the person who prepares the report must possess.

(6)     A reference in this section to a licensee extends to a former licensee.

(7)        A requirement under any other provision of this Act to provide any information or report extends to a former licensee to the extent that the information or report is reasonably required in connection with the operation or administration of this Act.

Inspections

Summary

Under Part 14 of the South Australia P&GE Act, authorised officers may, for the purposes of undertaking an authorised investigation (as defined in section 119):

  1. enter and inspect land and any operations or activities conducted on the land (see section 120); and
  2. require certain persons to answer questions, take reasonable steps to obtain information, or produce certain records (see sections 121 and 122). 

Section 123 entitles the Minister to publish reports setting out the results of authorised investigations, although any such report will be protected by absolute privilege. 

Article/Section No.

Section 119
Section 120
Section 121
Section 122
Section 123

Instrument Text

Part 14—Investigation and enforcement

119—Authorised investigations

An investigation by an authorised officer is an authorised investigation if the purpose

of the investigation is—

(a) to monitor compliance with this Act; or

(b) to gather information about a suspected offence against this Act; or

(c) to gather information about personal injury or loss of property related to authorised activities; or

(d) to gather information about the environmental impact of authorised activities; or

(e) to gather other information relevant to the administration or enforcement of this Act.

120—Powers of entry and inspection

(1) For the purpose of carrying out an authorised investigation, an authorised officer may—

(a)     enter land, and inspect the land and any operations or activities conducted on the land; or

(b)     examine anything on the land; or

(c)     take photographs, films or videos; or

(d)     carry out tests on wells, facilities and equipment; or

(e)     take and remove samples; or

(f)     take and remove any thing that may be evidence of non-compliance with this Act.

(2) A person must not, without reasonable excuse, obstruct an authorised officer in the exercise of powers under this section.

Maximum penalty: $4 000 or imprisonment for 6 months.

121—Power to gather information

(1)     An authorised officer may require a person who may be in a position to provide information relevant to any matter subject to an authorised investigation—

(a)     to answer a question relevant to the investigation; or

(b)     to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer.

(2)     A person required to answer a question under this section must answer the question to the best of the person's knowledge, information and belief.

Maximum penalty: $4 000 or imprisonment for 6 months.

(3)     A person of whom a requirement is made under subsection (1)(b) must comply with the requirement.

Maximum penalty: $4 000 or imprisonment for 6 months.

(4)     A person is not required to answer a question or to provide information under this section if the answer to the question or the information would tend to incriminate the person of an offence and the person objects to answering the question or providing the information on that ground.

122—Production of records

(1)     This section applies to records relating to— (a)  authorised activities; or

(b)     the production of a regulated substance; or

(c)     the sale of, or any other dealing with, a regulated substance produced under this Act; or

(d)     other matters relevant to the calculation of the royalty payable on any such substance.

(2)     A person who has possession or control of a record to which this section applies must, at the request of an authorised officer—

(a)     produce the record for inspection by the authorised officer; and

(b)     answer any questions that the authorised officer reasonably asks about the record.

Maximum penalty: $4 000 or imprisonment for 6 months.

(3)     An authorised officer may retain records produced under this section for the purpose of making copies of them.

123—Publication of results of investigation

(1)     The Minister may publish a report setting out the results of an authorised investigation.

(2)     A report published under this section is protected by absolute privilege.

(3)        Information on the authorised investigations carried out during the course of a year must be included in a report published by the department on an annual basis.

Operational liabilities

Summary

Section 86A requires licensees (including holders of exploration licenses and holders of gas storage licenses) to carry out fit-for purpose assessments of facilities operated in the licence area, while section 87 requires licensees to carry out regulated activities such as CO2 storage with due care for, among other things:

  1. the health and safety of persons affected by the activities; and
  2. the environment.

 

Failure to comply with these provisions is subject to penalty.

 

Under section 111, licensees are liable to compensate the state of South Australia for the cost of environmental rehabilitation the state is reasonably required to carry out as a result of serious environmental damage, or the threat or potential of serious environmental damage, arising from activities carried out under a licence.  

Article/Section No.

Section 86A
Section 87
Section 111

Instrument Text

Division 10—General requirements for operations 86A—Fitness-for-purpose assessment

(1) In this section— prescribed licence means—

(a)     a retention licence; or

(b)     a production licence; or

(c)     a pipeline licence; or

(d)     an associated activities licence; or

(e)     a special facilities licence.

(2) A licensee under a prescribed licence must carry out fitness-for-purpose assessments of facilities operated on land within the area of the licence at intervals prescribed by the regulations in order to assess risks imposed by the facilities on—

(a)     public health and safety; and

(b)     the environment; and

(c) the security of production or supply of natural gas (so far as this may be relevant).

(3)     An assessment under this section must comply with any requirements prescribed by the regulations.

(4)     The licensee must prepare a report on the assessment in a manner and form determined by the Minister and furnish a copy of the report to the Minister in accordance with the regulations.

(5)     A report under this section must comply with any other requirements prescribed by the regulations.

(6)     A licensee must promptly carry out any remedial action that is necessary or appropriate in view of a report under this section (and, in particular, must ensure that any identified risks are eliminated or reduced so far as is reasonably practicable).

(7)     A licensee who fails to comply with a requirement under this section is guilty of an offence.

Maximum penalty: $120 000.

87—Activities to be carried out with due care and in accordance with good industry practice

A licensee must carry out regulated activities—

(a)

with due care for—

(i)      the health and safety of persons who may be affected by those activities; and

(ii)     the environment; and

(iii)    where relevant—the need to ensure, in a case where interruption of natural gas supply could cause significant social disruption, that facilities for processing and transporting natural gas are designed, constructed, managed and operated on a prudential basis so as to provide a reliable and adequate supply of natural gas; and

in accordance with good practice as recognised in the relevant industry.

(b) Maximum penalty: $120 000.

[…]

111—Liability for damage caused by authorised activities

(1) A licensee (or former licensee) is liable to compensate the State for the cost of environmental rehabilitation the State is reasonably required to carry out as a result of serious environmental damage, or the threat or potential of serious environmental damage (insofar as this may be reasonably assessed), arising from activities carried out under the licence.

(2)     If a licensee provides the Minister with a report, made by an independent expert acceptable to the Minister, containing an assessment of the risk inherent in regulated activities, and of the precautions necessary to eliminate or minimise the risk, the Minister may enter into an agreement with the licensee under which—

(a)     the licensee is obliged to take specified precautions to eliminate or minimise the risk; and

(b)     the licensee's liability under this section is limited or excluded.

(3) The Minister may recover compensation on behalf of the State under this section in a court having jurisdiction in cases of tort up to the amount claimed.

Enforcement

Summary

Section 77 of the South Australia P&GE Act stipulates that non-compliance with a condition of a licence constitutes an offence subject to a maximum penalty of AUD120 000, while under section 91 the Minster may suspend or terminate a licence for non-compliance with the Act or a licence condition.

 

Several provisions in the Act specify that contravention of their terms may attract an administrative penalty. Detailed terms and conditions for administrative penalties are set out in section 136.

 

Under Part 14 of the Act, authorised officers may undertake “authorised investigations” for the purposes of, among other things:

  1. monitoring compliance with the Act;
  2. gathering information about a suspected offence against the Act;
  3. gathering information about personal injury, loss of property or environmental impacts related to authorised activities; or
  4. gathering other information relevant to the administration or enforcement of the Act.

 

An authorised officer undertaking an authorised investigation has the power to:

  1. enter and inspect land and any operations or activities conducted on the land (see section 120); and
  2. require certain persons to answer questions, take reasonable steps to obtain information, or produce certain records (see sections 121 and 122).  

Article/Section No.

Section 77
Section 91
Section 119
Section 120
Section 121
Section 122
Section 123
Section 136

Instrument Text

77—Non-compliance with licence conditions

If a licence condition is not complied with, the licensee is guilty of an offence. Maximum penalty: $120 000.

[…]

91—Disciplinary power to suspend or cancel licence

(1) If a licensee fails to comply with this Act or a condition of the licence, the Minister may, by written notice given to the licensee—

(a)     suspend the licence for a specified period or until the Minister terminates the suspension; or

(b)     cancel the licence.

(2) Before the Minister suspends or cancels the licence, the Minister must give the licensee a notice of default—

(a)     specifying the default; and

(b)     stating the action that the Minister proposes to take; and

(c)     if the default is capable of being remedied—allowing the licensee a reasonable opportunity to remedy the default; and

(d)     whether or not the default is capable of being remedied—giving the licensee a reasonable opportunity to show cause why the proposed action should not be taken.

(3) If the notice allows the licensee an opportunity to remedy a default, and the licensee remedies the default to the Minister's satisfaction, the Minister is not to suspend or cancel the licence on the basis of that default.

[…]

Part 14—Investigation and enforcement

119—Authorised investigations

An investigation by an authorised officer is an authorised investigation if the purpose

of the investigation is—

(a) to monitor compliance with this Act; or

(b) to gather information about a suspected offence against this Act; or

(c) to gather information about personal injury or loss of property related to authorised activities; or

(d) to gather information about the environmental impact of authorised activities; or

(e) to gather other information relevant to the administration or enforcement of this Act.

120—Powers of entry and inspection

(1) For the purpose of carrying out an authorised investigation, an authorised officer may—

(a)     enter land, and inspect the land and any operations or activities conducted on the land; or

(b)     examine anything on the land; or

(c)     take photographs, films or videos; or

(d)     carry out tests on wells, facilities and equipment; or

(e)     take and remove samples; or

(f)     take and remove any thing that may be evidence of non-compliance with this Act.

(2) A person must not, without reasonable excuse, obstruct an authorised officer in the exercise of powers under this section.

Maximum penalty: $4 000 or imprisonment for 6 months.

121—Power to gather information

(1)     An authorised officer may require a person who may be in a position to provide information relevant to any matter subject to an authorised investigation—

(a)     to answer a question relevant to the investigation; or

(b)     to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer.

(2)     A person required to answer a question under this section must answer the question to the best of the person's knowledge, information and belief.

Maximum penalty: $4 000 or imprisonment for 6 months.

(3)     A person of whom a requirement is made under subsection (1)(b) must comply with the requirement.

Maximum penalty: $4 000 or imprisonment for 6 months.

(4)     A person is not required to answer a question or to provide information under this section if the answer to the question or the information would tend to incriminate the person of an offence and the person objects to answering the question or providing the information on that ground.

122—Production of records

(1)     This section applies to records relating to— (a)  authorised activities; or

(b)     the production of a regulated substance; or

(c)     the sale of, or any other dealing with, a regulated substance produced under this Act; or

(d)     other matters relevant to the calculation of the royalty payable on any such substance.

(2)     A person who has possession or control of a record to which this section applies must, at the request of an authorised officer—

(a)     produce the record for inspection by the authorised officer; and

(b)     answer any questions that the authorised officer reasonably asks about the record.

Maximum penalty: $4 000 or imprisonment for 6 months.

(3)     An authorised officer may retain records produced under this section for the purpose of making copies of them.

123—Publication of results of investigation

(1)     The Minister may publish a report setting out the results of an authorised investigation.

(2)     A report published under this section is protected by absolute privilege.

(3)        Information on the authorised investigations carried out during the course of a year must be included in a report published by the department on an annual basis.

[…]

136—Administrative penalties

(1)  This section applies to any provision of this Act (or the regulations) at the foot of which the words "Administrative penalty" appear.

(2) If a licensee contravenes a provision to which this section applies, the Minister may, by notice in writing to the licensee, impose an administrative penalty on the licensee.

(3) If the contravention is of a continuing nature, the Minister may impose a further administrative penalty by way of a daily penalty for every day the contravention continues from the date of the notice until the contravention is remedied.

V. Management of long-term responsibilities and liabilities
VI. Additional Issues
Additional Issues

Article/Section No.

Section 59A
Section 59B
Section 59C
Section 59D
Section 59E

Instrument Text

42—Unitisation of production
(1) If the Minister is satisfied that—
(a) a natural reservoir containing, or suitable for storage of, a regulated substance extends beyond the area of a production licence; and
(b) the adjacent area is covered by an exploration, retention or production licence held by a different person,
the Minister may, by written notice given to the holders of the respective licenses, require them to enter into negotiations with a view to establishing a scheme for working or using the relevant areas as a single unit.
(2) If the holders of the licenses fail to reach agreement on the terms of such a scheme within a reasonable time, the Minister may, by written notice given to the licensees, establish such a scheme.
(3) Before the Minister establishes a scheme under this section, the Minister must allow the holders of the licenses affected by the scheme a reasonable opportunity to make submissions on the terms of the scheme.
(4) A scheme under this section is binding on the holders, for the time being, of the licenses affected by the scheme.