15 December 2014
 Update on legislative and regulatory amendments
 Amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006

Designated waters

Eligible Voluntary Actions
 Amendments to the regulations

Financial assurance
 Annual titles administration levies
 2015 Offshore Petroleum Exploration Acreage Release proposed areas
 2014 Acreage Release round 2 - Petroleum exploration opportunities
 2013 Acreage Release – round 2 award of exploration permits
 Are you on our distribution list?
Update on legislative and regulatory amendments
Amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006
On 3 December 2014, two offshore legislation amendment bills were introduced into Parliament:
 Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Measures)
Bill 2014 (Miscellaneous Measures Bill)
 Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment
(Designated Coastal Waters) Bill 2014 (Regulatory Levies Amendment Bill).
The Miscellaneous Measures Bill will amend the Offshore Petroleum and Greenhouse Gas Storage
Act 2006 (OPGGS Act) to:

Expand the definition of ‘designated coastal waters’ to include all waters of the sea
landward of the Commonwealth offshore area, including sea waters internal to a State or
Territory.
www.petroleum-acreage.gov.au

Provide a second mechanism for titleholders to take eligible voluntary actions, where there
is more than one holder of a single title, as an alternative to nominating one titleholder in
the group.
Designated coastal waters
Recognising the significant increases in efficiency associated with regulatory streamlining, the
Commonwealth is seeking to enable further streamlining of regulatory arrangements in respect of
all offshore petroleum activities. As part of this process, the Commonwealth is encouraging the
States and the Northern Territory (NT) to progress conferral of occupational health and safety,
structural integrity and environmental management functions and powers upon the National
Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in respect of
the waters of the sea within their respective jurisdictions.
The States and the NT may currently confer functions and powers on NOPSEMA under State and
NT legislation in respect of their ‘designated coastal waters’. As presently defined, these waters
only consist of the area seaward of the territorial sea baseline to the line three nautical miles from
this baseline, which divides State and NT waters from waters within the jurisdiction of the
Commonwealth. The OPGGS Act currently restricts the ability for functions and powers to be
conferred on NOPSEMA with respect to waters landward of the territorial sea baseline. In
particular, functions and powers are not permitted to be conferred at all in respect of waters
within the limits of the States or the NT.
The amendments in the Miscellaneous Measures Bill will therefore expand the definition of
‘designated coastal waters’ such that the States and the NT will be permitted to confer functions
and powers on NOPSEMA under State/NT legislation in respect of all sea waters landward of the
Commonwealth offshore area. This will enable the States and the NT to confer functions and
powers over the widest possible geographic area within their respective jurisdictions, should they
elect to do so.
The Regulatory Levies Amendment Bill will amend the Offshore Petroleum and Greenhouse Gas
Storage (Regulatory Levies) Act 2003 (the Levies Act) as a consequence of the amendments to the
definition of ‘designated coastal waters’ in the OPGGS Act.
The Levies Act imposes levies on the offshore petroleum industry to recover the costs of
NOPSEMA’s regulatory activities in Commonwealth waters and, if functions and powers have been
conferred, in designated coastal waters as currently defined in the OPGGS Act. The expansion of
that definition in the OPGGS Act by the amendments in the Miscellaneous Measures Bill would
therefore also have applied to expand the application of the Levies Act.
However, legal advice obtained by the Department of Industry indicated that this consequential
expansion of the application of the Levies Act would create a medium to high level of risk of
constitutional invalidity. The Regulatory Levies Amendment Bill therefore consequentially amends
the Levies Act to limit the operation of the levy regime to the area constituted by the existing
definition of designated coastal waters. In other words, the Levies Act will continue to apply in the
same area that it currently does, and not to the expanded area of ‘designated coastal waters’.
The department will need to consider alternative options to ensure that NOPSEMA will be able to
fully recover costs associated with the performance of regulatory functions conferred by a State or
the NT, should the geographical area for the conferral extend into that area landward of the
territorial sea baseline.
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The amendments in both Bills will commence on the day after Royal Assent.
Eligible voluntary actions
The Miscellaneous Measures Bill will also amend the existing administrative arrangements for
multiple registered holders of a single title to take certain actions (known as ‘eligible voluntary
actions’) that are permitted, but not required, to be taken under the OPGGS Act or regulations.
Currently, the registered holders of the title are not entitled to take an eligible voluntary action
unless they have nominated one of them to take eligible voluntary actions on behalf of all of them.
If a nomination is in place and the nominated titleholder takes an eligible voluntary action that is
expressed to be made on behalf of all of the registered holders, the OPGGS Act has effect as if the
eligible voluntary action were taken by the registered holders jointly. While this arrangement has
been in place for a number of years, the application of the process in practice has created some
confusion, particularly in relation to the mandatory nature of the process, and also created several
unintended consequences.
The Miscellaneous Measures Bill will therefore amend the OPGGS Act to provide a second,
alternative mechanism for multiple registered holders of a single title to take eligible voluntary
actions. The amendments will expressly permit multiple titleholders to choose between (a) using
the existing nominations process for the taking of eligible voluntary actions, and (b) taking these
actions jointly by way of affixing the signatures of all titleholders.
The amendments will also expressly clarify that, if a nomination ceases to be in force because it is
revoked by another registered holder of the title or because the nominated titleholder ceases to
be a registered holder of the title, any eligible voluntary actions validly taken by the nominated
titleholder before the nomination ceases to be in force will remain valid. In addition, the
amendments will impose a requirement on a titleholder who revokes a nomination to notify the
other holders of the title in writing as soon as reasonably practicable after the revocation being
made, to ensure that all titleholders, including the nominated titleholder, are aware of the
revocation.
These amendments will commence on the day after Royal Assent.
The full content and status of the Miscellaneous Measures Bill and Regulatory Levies Amendment
Bill, including associated explanatory memoranda, are available at:

Miscellaneous Measures Bill

Regulatory Levies Amendment Bill
Amendments to regulations made under the OPGGS Act
Financial Assurance
On 11 December 2014, the Offshore Petroleum and Greenhouse Gas Storage (Environment)
Amendment (Financial Assurance) Regulation 2014 (the Regulation) was made by the GovernorGeneral on the advice of the Federal Executive Council.
As previously advised in the October 2014 edition of Australian Petroleum News, the Regulation
amends the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (the
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Environment Regulations) to fully implement previous amendments to the OPGGS Act, which
commenced on 29 November 2013. Those amendments clarified that it is compulsory for a
titleholder to maintain sufficient financial assurance to ensure that it can meet all costs, including
extraordinary costs, expenses or liabilities arising in connection with the carrying out of a
petroleum activity undertaken under the title, including expenses relating to the clean-up or other
remediation of the effects of an escape of petroleum. The amendments also provided the power
to make regulations to require that a demonstration of compliance can be sought as a prior
condition of acceptance of an environment plan.
The amendments to the Environment Regulations made by the Regulation, which is scheduled to
commence on 1 January 2015, will require a demonstration of compliance with the financial
assurance requirement in the OPGGS Act to be made by the titleholder to NOPSEMA, in an
acceptable form, as a pre-condition to acceptance of an environment plan or a proposed revision
of an environment plan. The amendments will also make failure to maintain ongoing compliance
with financial assurance requirements, in a form acceptable to NOPSEMA, a ground for withdrawal
of acceptance of an environment plan.
A fee will be payable by titleholders for the assessment by NOPSEMA of financial assurance
arrangements. The fee will not exceed the total of the expenses incurred by NOPSEMA for the
purposes of assessing the proposed financial assurance arrangements.
The amendment to require a demonstration of compliance with financial assurance requirements
as a precondition to acceptance of an environment plan or revised environment plan will only
apply to environment plans, or proposed revisions of environment plans, submitted to NOPSEMA
on or after 1 January 2015. However, as the requirement under the OPGGS Act to maintain
sufficient financial assurance commenced on 29 November 2013, titleholders should already be
compliant with financial assurance obligations as specified in the OPGGS Act.
Please see the October 2014 edition of Australian Petroleum News for further background relating
to the development of the Regulation. NOPSEMA has also published a guideline to assist
titleholders in understanding the financial assurance requirements, and describe the steps to be
taken by titleholders to establish compliance. The guideline is available on the NOPSEMA website.
Industry, through the Australian Petroleum Production & Exploration Association, has developed a
costing methodology underpinning the matter of sufficiency of the financial assurance held in
relation to an activity. The NOPSEMA guideline explains the application of this methodology or
potential use of other costing methods.
Once registered, the Regulation and a supporting Explanatory Statement will be available on
ComLaw. It is anticipated the Regulation will be registered on the Federal Register of Legislative
Instruments by early next week.
Annual titles administration levies
On 11 December 2014, the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies)
Amendment (Remittal and Refund) Regulation 2014 (the Regulation) was made by the GovernorGeneral on the advice of the Federal Executive Council.
As flagged in the September 2014 edition of Australian Petroleum News, the Regulation will
amend the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Regulations 2004
(the Regulatory Levies Regulations) as a consequence of recent amendments to the Offshore
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Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 (the Regulatory Levies Act)
which ensure that annual titles administration levy is imposed for a year of the term of a title,
even if the title does not remain in force for the full year. The amendments to the Regulatory
Levies Regulations will ensure that, if the title is not in force for the full year for which levy is
imposed, an amount or part of an amount of levy for the year must be remitted or refunded to the
titleholder.
In most cases when a title ceases to be in force, in whole or in part, before the end of a year for
which levy is imposed, the amount of levy applicable to the part of the year during which the title
is not in force will be remitted or refunded. However, if a title ceases to be in force during a year
because it is surrendered, in whole or in part, and the application for consent to surrender was
submitted before the beginning of the year for which levy is imposed, the amount of levy for the
full year that is applicable to the title or part of the title will be remitted or refunded to the
titleholder.
Refund or remittal will not apply in the event that a title ceases to be in force because it is
cancelled by the Joint Authority (for a petroleum title) or the responsible Commonwealth Minister
(for a greenhouse gas titleholder).
Both the amendments to the Regulatory Levies Act and the supporting amendments to the
Regulatory Levies Regulations will commence on 18 January 2015.
Once registered, the Regulation and a supporting Explanatory Statement will be available on
ComLaw. It is anticipated the Regulation will be registered on the Federal Register of Legislative
Instruments by early next week.
2015 Offshore Petroleum Exploration Acreage release proposed areas
The Department of Industry released the 2015 Offshore Petroleum Exploration Acreage release
proposed areas in the 9 December 2014 issue of the Australian Petroleum News. This issue
included a map of the proposed areas.
Any work or forward planning undertaken by companies in relation to the proposed areas prior to
the official launch in May 2015 is done at the commercial risk and cost of individual operators.
Without prejudice to the final content of the 2015 Acreage Release, shape files of the proposed
areas as set out in the 9 December 2014 Australian Petroleum News are available on the
department’s website.
Petroleum exploration opportunities - 2014 Acreage Release round 2
Closing date Wednesday 2 April 2015
This round includes 12 areas and two rerelease areas from round 1. Entities that have entered into
a Good Standing Arrangement with the Joint Authority are encouraged to review the rerelease
areas. It is the responsibility of entities that have entered into a Good Standing Arrangement to
maintain good standing with the Joint Authority.
Geoscience Australia provides precompetitive geological data associated with the release areas at
the cost of transfer; the data package can be ordered by emailing ausgeodata@ga.gov.au.
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Please note the website contains the most up to date information.
Area
Basin
Sub basin
AC14-1
Bonaparte
Vulcan
W14-1
W14-6
Bonaparte
Northern Carnarvon
Petrel
Rankin Platform
W14-8, W14-9, W14-10,
W14-11, W14-12 and W14-13
Northern Carnarvon
Exmouth Plateau
W14-17 and W14-18
Northern Carnarvon
Exmouth
W14-19
Bight
Eyre
W14-3
Browse
Caswell
W14-14
Northern Carnarvon
Barrow
Re-release areas
2013 Acreage Release – Round 2 award of exploration permits
VIC/P70 (released as V13-2) located approximately 110km east of Sale in the Gippsland Basin
offshore Victoria, has been awarded to Liberty Petroleum Corporation. Liberty proposed an $81.3
million guaranteed work program of 2D and 3D seismic interpretation, petroleum systems study,
prospect lead and development, gas marketing study, development concepts, capex study and
two exploration wells. The secondary work program consists of geological and geophysical studies,
one exploration well and post well studies, totalling $50.9 million. There were four other bids for
this area.
NT/P85 (released as NT13-1) located approximately 225 km from Darwin in the Bonaparte Basin
offshore Northern Territory, has been awarded to Santos Offshore Pty Ltd and Origin Energy
Resources Limited. The joint venture proposed a $28.3 million guaranteed work program of
geotechnical studies, 1,600 km² of 3D seismic acquisition, processing and interpretation. The
secondary work program consists of geological and geophysical studies including updating
deposition models with regional data and an exploration well, totalling $36 million. There was one
other bid for this area.
WA-505-P (released as W12-7) located approximately 400 km north of Port Headland in the
Roebuck Basin offshore Western Australia, has been awarded to Apache Northwest Pty Ltd.
Apache proposed a $9.2 million guaranteed work program of 393km² of 3D seismic acquisition,
geotechnical studies, 393 km² 3D seismic reprocessing, rock physics/quantitative interpretation
and 3D seismic inversion studies. The $20.4 million secondary work program consists of
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geotechnical studies including prospect mapping and risk assessment and one exploration well
totalling $20.4 million. There was one other bid for this area.
WA-506-P (released as W13-6) located approximately 160 km north of Karratha in the Northern
Carnarvon Basin offshore Western Australia, has been awarded to Statoil Australia Theta B.V.
Statoil proposed a $50 million guaranteed work program of 2,000 km 2D seismic survey, 10,000
km multi-beam swath bathymetry data, acquisition of 50 piston core samples, 2D seismic
interpretation and studies, 3,500 km² 3D seismic acquisition and interpretation. The $216 million
secondary work program consists of two exploration wells, 2,500 km² of 3D seismic survey,
analysis and interpretation totalling $216 million. There were two other bids for this area.
WA-507-P (released as W13-7) located approximately 160 km north of Karratha in the Northern
Carnarvon Basin offshore Western Australia, has been awarded to Odyssey O&G Pty Ltd and Black
Swan Resources Pty Ltd. The joint Venture proposed a $2.25 million guaranteed work program of
geological and geophysical studies, 1,587 km2 of 3D seismic data purchase, 3D seismic
interpretation, amplitude analysis, seismic reprocessing and petroleum system analysis. The
$30.75 million secondary work program consists of interpretation of reprocessed seismic data,
rock physic studies, reservoir and play analysis, prospect ranking and modelling, geochemical
studies and one exploration well. There were no other bids for this area.
WA-508-P (released as W13-4) located approximately 245km north-west of Broome in the Browse
Basin offshore Western Australia, has been awarded to Pathfinder Energy Pty Ltd. Pathfinder
proposed a $2.12 million guaranteed work program of geological and geophysical studies, 1,000
km of 2D seismic reprocessing, 221 km2 of 3D seismic acquisition, mapping and analysis of
petroleum systems. The $61.2 million secondary work program consists of geological and
geophysical studies, economic evaluation and risk assessment, engineering studies and one
exploration well totalling. There were no other bids for this area.
WA-509-P (released as W13-5) located approximately 230km north-west of Broome in the Browse
Basin offshore Western Australia, has been awarded to Pathfinder Energy Pty Ltd. Pathfinder
proposed a $10.62 million guaranteed work program of geological and geophysical studies, 1,000
km of 2D seismic reprocessing, 1,411 km2 of 3D seismic acquisition, mapping and analysis of
petroleum systems. The secondary work program consists of geological and geophysical studies,
economic evaluation and risk assessment, engineering studies and one exploration well totalling
$61.2 million. There were no other bids for this area.
From the Round 2 release areas NT13-2, NT13-3, T12-2, V12-3 and W12-11 have reverted to
vacant acreage. Areas W13-8, W13-19 and W13-20 were rereleased for bidding, and are currently
under assessment.
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