21 January 2014
Practice Group:
Energy, Infrastructure
and Resources
Oil & Gas
Energy
Environmental, Land
and Natural
Resources
Maritime
Australian Offshore Petroleum – What's New in
2014
By Clive Cachia, Eric Fethers and Jo Garland
Summary of What's New in 2014
The year 2014 brings a number of regulatory changes for Australia’s offshore petroleum
industry that will affect domestic and international investors, operators and owners. Key
changes include:
 proposal for a 'one stop shop' for environmental approvals - expected to be approved
by the Minister at the end of February 2014
 amendments to improve and clarify environmental management – expected to be
finalised by February 2014
 revised cash-bidding system – effective from 14 December 2013
 release of an Issues Paper to inform development of an Energy White Paper –
submissions due 7 February 2014
 revised National Plan for Maritime Environment Emergencies - due to come into force
mid 2014
 changes in registration fees and levies – effective from 1 November 2013 and 1
January 2014 respectively.
Streamlining of Environmental Approvals
A proposal to create a one stop shop for offshore petroleum environmental assessments
(Streamlining Proposal) is expected to be approved by the Minister for the Environment
at the end of February 2014. Currently, environmental assessment of offshore petroleum
activities occurs at both a State and Commonwealth level. Under the Streamlining
Proposal NOPSEMA would be the sole environmental regulator of offshore petroleum
activities.
The Streamlining Proposal is in response to several independent reviews (including the
Productivity Commission's Report on Mineral and Energy Resource Exploration dated
September 2013) recommending streamlining of the State and Commonwealth
regulatory requirements. Consultation on the key documents closed on 20 December
2013. A supplementary report and, if necessary, a revised program taking into account
the comments received will soon be provided to the Minister for the Environment for
approval.
Amendments to Environment Regulations
Proposed amendments to the Offshore Petroleum and Greenhouse Gas Storage
(Environment) Regulations 2009 (Environment Regulations), additional to those under
the Streamlining Proposal, are expected to be finalised by February 2014. The
amendments seek to improve and clarify the regulation of environmental management of
offshore petroleum and greenhouse gas storage activities.
Australian Offshore Petroleum – What's New in 2014
The following are proposed key amendments to the Environment Regulations.
 Shifting the responsibility for compliance with the Environment Regulations from the
operator to the titleholder. While the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (OPGGSA) places responsibility on the titleholder to control, clean
up and remediate any damage to the environment, the operator (not the titleholder) is
responsible for compliance with the Environment Regulations. This disjoint has been
flagged as a major design weakness in the Environment Regulations as the operator
may not have the level of resources or control necessary to comply with the
Environment Regulations. Accordingly, shifting responsibility to the titleholder has
been proposed.
 Requiring the Regulator to publish proposed activities on receipt of an environment
plan by the titleholder.
 Clarifying the definition of 'petroleum activity' so that ordinary maritime activities (such
as pipeline route surveys) are not captured within the definition and therefore not
subject to an environment plan.
 Giving the Regulator power to request further information when assessing
environment plans.
 Clarifying what is a 'recordable incident'.
Consultation on the amendments closed on 20 December 2013 and submissions will be
taken into account when finalising the amendments in February 2014.
Amendments to Cash Bidding Model
The cash bidding model under the OPGGSA was amended with effect from 14
December 2013.
The following are a number of key changes that have been implemented to the cash
bidding model.
 Limiting the discretion of the highest bidder to refuse an offer of a permit. A 10%
deposit is payable upon placement of a cash bid and is forfeited if the offer is refused
or full payment of the cash bid amount is not made by the due date.
 Allowing a reserve price to be set for each of the areas being released. The reserve
price may or may not be disclosed in advance of bid applications.
 Allowing a pre-qualification assessment of potential bidders prior to cash bids being
placed.
 Where the two highest cash bids are equal, further cash bids are invited with the
highest further bid being offered the permit (or where both further bids are also tied,
the first bid received will be offered the permit).
Consultation on Energy White Paper
The Department of Industry (DoI) has released an 'Energy White Paper - Issues Paper:
to inform preparation of a White Paper (December 2013)' (Issues Paper) for public
comment.
The Issues Paper is the beginning of consultation on the Energy White Paper that will be
developed by DoI. The Issues Paper outlines the scope of the Energy White Paper, maps
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Australian Offshore Petroleum – What's New in 2014
links to other related policy and regulatory developments, and seeks comment on issues
to be considered in a Green Paper that will outline possible policy approaches.
Comments on the Issues Paper should be sent to the DoI by 7 February 2014.
The resulting Green Paper is expected to be released for consultation in May 2014, with
the final Energy White Paper expected to be completed in September 2014.
More information on the Issues Paper can be found in our Legal Insight 'New Energy
White Paper Process Commences'.
Revised National Plan for Maritime Environmental Emergencies
A revised National Plan for Maritime Environmental Emergencies is due to come into
force mid 2014. The revised National Plan results from a significant review and lessons
learned from major Australian and international incidents.
Cessation of Registration Fees under OPGGSA
Registration fees under the OPGGSA were abolished effective from 1 November 2013.
Fees have now been replaced with application fees reflecting the costs incurred in
undertaking NOPTA’s relevant work. Importantly, there is now a flat application fee for
the approval of a transfer or dealing (rather than a fee based on the value of the permit).
Increased Safety Case and Environment Plan Levies
On 1 January 2014 the safety case levies rose by 13% and the environment plan levies
rose by 20%.
The increase was affected by the Offshore Petroleum and Greenhouse Gas Storage
(Regulatory Levies) Amendment (Safety Case and Environment Plan Levies) Regulation
2013 No. 273 (Cth) which amended the Offshore Petroleum and Greenhouse Gas
Storage (Regulatory Levies) Regulations (2004) 2004 No. 315 (Cth).
Authors:
Clive Cachia
Clive.Cachia@klgates.com
+61.2.9513.2515
Eric Fethers
Eric.Fethers@klgates.com
+61.8.9216.0922
Jo Garland
Jo.Garland@klgates.com
+61.8.9216.0914
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Australian Offshore Petroleum – What's New in 2014
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