OFFSHORE PETROLEUM EXPLORATION
ACREAGE RELEASE  AUSTRALIA 2014
Petroleum law and government
This fact sheet provides information on the legal
framework within which petroleum exploration and
development activity takes place in Australia including the
role of governments, petroleum law, offshore petroleum
titles, offshore greenhouse gas storage, onshore
petroleum exploration, the offshore safety and
environment regime and native title rights.
Roles and responsibilities of
Government
Australia’s system of government is founded in the liberal
democratic tradition and is one of the oldest continuous
democracies in the world. Australia is a representative
democracy where people eligible to vote elect
representatives to speak and make decisions on their
behalf. Australian citizens vote to elect representatives to
each of the three levels of government – federal, state or
territory and local.
The Constitution defines the responsibilities of the
Australian (federal) Government, which include foreign
relations, trade with other countries, defence and
immigration. Regional governments of states and
territories are responsible for issues such as transport
infrastructure, health and education and local
governments are responsible for issues such as road
maintenance, public facilities etc. All levels of
Government adhere to the principles of responsible
government and Australian law.
Australian governments do not undertake commercial
petroleum exploration or development. The governments’
roles in relation to the petroleum sector are to:

establish the macroeconomic environment (broad
economic policy);

provide a regulatory framework for exploration,
development, safety, environmental assessment and
revenue collection;
www.petroleum-acreage.gov.au

reduce commercial risk in petroleum exploration by
collecting and disseminating geoscientific information;
and

investigate ways to remove impediments to industry
competitiveness.
Both the federal government and the regional state and
territory governments have roles in facilitating petroleum
exploration and development:

the Australian Government is responsible for broad
economic policy and international matters, including
personal and company income tax, the overall level of
government spending, foreign investment guidelines,
trade and customs, commercial corporations and
international agreements;

beyond the coastal waters (seaward of the first three
nautical miles of the territorial sea) to the outer limits of
Australia's Exclusive Economic Zone, petroleum rights
are held by the Australian Government, with titles
administration carried out jointly with the relevant
regional state or territory government; and

onshore and in coastal waters (the first three nautical
miles from the coastline), the regional states
and territories allocate petroleum rights,
administer petroleum operations and collect royalties
on petroleum produced.
Due to their shared interest in the contribution of the
petroleum sector to national economic wellbeing, the
Australian Government holds regular consultations with
the regional governments with a view to ensuring
coordination of policy and regulatory requirements for the
sector.
Under international law, Australia has sovereignty over the
territorial sea and sovereign rights for exploring and
developing mineral and hydrocarbon resources over the
Exclusive Economic Zone and the Continental Shelf.
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DISCLAIMER: This fact sheet has been developed as a guide only. It does not replace or amend information provided in the Offshore Petroleum Legislation, Regulations and
Guidelines available at: www.nopta.gov.au/legislation. In the event that there is a discrepancy between this fact sheet and the legislation or regulations, the legislation or regulations
have precedence. Explorers should not rely solely on this information when making commercial decisions. Image courtesy of BHP Billiton Petroleum Pty Ltd.
This jurisdiction extends from the territorial sea baseline to
the outer edge of the Continental Shelf and accounts for
over 14.4 million square kilometres - an area greater than
Australia’s total land area and one of the largest marine
jurisdictions in the world. Petroleum exploration and
development in the Timor Sea Joint Petroleum
Development Area (JPDA) are managed jointly between
Australia and Timor-Leste.
Petroleum law in Australia
The legal framework within which offshore petroleum
exploration and development activity takes place in
Australia is a result of agreement on the division of
responsibilities between the Australian Government and
the regional state and Northern Territory (NT)
governments under the Offshore Constitutional
Settlement.
Offshore petroleum operations beyond coastal waters
(i.e. greater than three nautical miles from the low tide
coastline) are governed by Commonwealth legislation
known as the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (OPGGSA) and associated Regulations.
Within the OPGGSA legislative framework, the Australian
Government and the states/NT jointly grant petroleum
titles and exercise resource development functions
through a Joint Authority (JA) arrangement. Each JA
comprises the Australian Government Minister with
responsibility for resources and energy and the relevant
state/NT Minister. In addition, the OPGGSA makes the
National Offshore Petroleum Titles Administrator (NOPTA)
responsible for titles administration and data management
functions. The National Offshore Petroleum Safety and
Environmental Management Authority (NOPSEMA), as
Australia’s independent regulator of offshore petroleum
operations, is responsible for regulation of occupational
health and safety, structural integrity of facilities and wells,
environmental management and day-to-day operational
compliance. NOPSEMA is the regulator in Commonwealth
waters, and also in those coastal waters jurisdictions
where state and NT powers have been conferred on
NOPSEMA.
The legislation provides for the orderly exploration for, and
recovery of, offshore petroleum resources and sets out a
basic framework of rights, entitlements and responsibilities
of governments and industry.

granting of retention leases over discoveries that are
not currently commercially viable but are likely to
become commercial within 15 years;

granting of production and pipeline licences;

granting of infrastructure licences for various
processing activities;

renewal of titles (where appropriate);

approval of applications for the registration of legal
transactions, including farm-ins and transfers of titles;

granting of special prospecting
authorities, access authorities, and consents for
scientific investigations; and

variations of title conditions, exemption from title
commitments, surrender of titles by a titleholder and
cancellation of titles for non-compliance with the
conditions of the title or the OPGGSA or regulations.
Except for environmentally sensitive areas (such as the
Great Barrier Reef Marine Park off the Queensland coast),
petroleum operations are permitted on most parts of the
continental shelf. More information on restrictions in
Commonwealth Marine Reserves can be found at:
http://www.environment.gov.au/marinereserves/.
Factors such as navigation, defence, native title rights,
fisheries and the marine environment are carefully
considered prior to the release of acreage by the Joint
Authority. Once titles are awarded, these issues are
managed via the environment plan that must be accepted
by NOPSEMA before a petroleum activity can be carried
out and by compliance with titleholder obligations under
the OPGGSA (for example, in section 280 OPGGSA).
Additional information on matters coming within the
Australian Government's responsibilities for offshore
exploration and development is set out in:

the OPGGSA, the associated Explanatory
Memoranda and Second Reading Speeches to the
original 2006 Act and subsequent amendments;

the Regulations issued under the OPGGSA (notably
in relation to management of the environment,
occupational health and safety, well operations, field
development plans and data management);

the Offshore Petroleum and Greenhouse Gas
Storage (Regulatory Levies) Act 2003 and
Regulations;

the Petroleum Resource Rent Tax Assessment Act
1987 and company taxation legislation;
The key matters covered in the legislation are:

the release of vacant acreage and the issue of
invitations to apply for exploration permits;

granting of permits to successful applicants and
determination of conditions of the title;

Guidelines issued to assist with the administration of
the legislation; and

declaring locations where petroleum has been
discovered;

the International Unitisation Agreement (IUA) and
various treaties with neighbouring states including
the Timor Sea Treaty and the Perth Treaty, which
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Offshore Petroleum Exploration Acreage Release
establish Australia’s northern maritime boundaries
and consequent rights and obligations of the parties
in regards to the exploration for, and exploitation of,
hydrocarbon resources.
An electronic compendium of current legislation and
regulations governing the offshore petroleum industry can
be found at: http://www.nopta.gov.au/legislation/index.html
Industry may also subscribe to receive regular updates on
regulatory developments through the free occasional
e-newsletter, Australian Petroleum News, by emailing your
details to petroleum.exploration@industry.gov.au.
Onshore petroleum titles
In Australia's onshore areas and within coastal waters,
petroleum operations are governed by the legislation of
states and the NT. A two-stage system of exploration
permit and production licence has generally been adopted
in these areas. However, the minimum area, initial term of
the permits, and charges and royalties levied vary from
jurisdiction to jurisdiction. Further information can be
obtained from the relevant state or territory department.
Offshore petroleum titles
Petroleum activities may only occur in Commonwealth
offshore waters if an entity holds a valid petroleum title or
authorisation granted in accordance with the OPGGSA.
There are five types of petroleum titles that may be
granted depending on the activity to be undertaken:

Work Program Exploration Permit – a six year title
(that may be renewed for two periods of five years)
that provides rights to undertake exploratory
activities such as seismic surveys and drilling within
the permit area in accordance with an approved
annual work program;

Cash Bid Exploration Permit – a six year title (that
may be renewed for one period of five years if so
specified) that provides rights to undertake
exploratory activities such as seismic surveys and
drilling within the permit area;

Retention Lease – a five year title (can be renewed)
granted to the holder of an exploration permit or a
production licence where a discovery has been made
which is not currently commercially viable, but is
likely to become so within 15 years;

Production Licence – a life-of-field title that is
granted to the holder of an exploration permit or a
retention lease for the recovery of petroleum
following a commercial discovery;

Infrastructure Licence – an indefinite term licence
granted to enable the construction of offshore
facilities for the storage and conversion of petroleum
(e.g. gas to LNG or methanol) or to operate a floating
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LNG facility or an offshore production facility that is
located outside of the production licence area or held
under a different ownership structure; and

Pipeline Licence – an indefinite term licence
granted for the construction and operation of an
export pipeline to transport petroleum to shore or to
other facilities.
Petroleum titles are awarded on a successive basis,
beginning with an exploration permit. If a discovery is
made and a location is declared, the titleholder may apply
for a production licence (if the discovery is commercial) or
for a retention lease (if the discovery is not commercial but
is expected to become commercial within 15 years). From
a retention lease, the titleholder progresses to a
production licence once the discovery becomes
commercial. The chart overleaf outlines the basic offshore
title system.
Titles are awarded over areas comprising one or more
graticular blocks of 5 minutes longitude and 5 minutes
latitude. Part blocks may exist where graticular sections
are bisected by a jurisdictional boundary. In such cases,
the blocks are generally referenced as “part blocks” in a
title instrument, but they are still treated for all purposes as
“blocks” within an offshore area.
In areas not covered by titles, companies may apply for a
Special Prospecting Authority (SPA) to undertake seismic
or other geophysical or geochemical survey work (but not
to drill a well) in a particular area for a period of up to
180 days. A SPA provides a non-exclusive right to
examine an area prior to any potential invitation for
applications for an exploration permit. A SPA does not
provide any rights in relation to the award of a future
exploration permit.
Existing titleholders (including SPA holders) who wish to
undertake petroleum exploration activities (other than
drilling a well) in areas proximal to their existing title may
apply for an Access Authority. An Access Authority may
provide access to a vacant area or an area covered by a
title to enable the applicant to fully explore the area over
which it is the titleholder. An Access Authority will remain
in force for the period specified in the authority, unless
surrendered or cancelled, and does not provide any rights
in relation to the award of a future exploration permit.
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Offshore Petroleum Exploration Acreage Release
2014 Offshore petroleum titles process
(work program)
Area Selection
Areas nominated for release by industry, state/NT governments and Geoscience Australia.
Nominated areas are evaluated and selected for inclusion in a release
Acreage Release
Annual Acreage Release areas announced by the Federal Minister for Industry
(areas clearly identified as available for either work program bidding or for cash bidding)
Call for Work Program Bids
The Joint Authority issues an invitation through the Government Gazette for explorers to bid for
areas in the work program bidding rounds (6-12 months)
subsequent closing work program bidding rounds (usually 6 or 12 months)
Bids are assessed by the Joint Authority
The Joint Authority agrees on the successful applicants. NOPTA, on behalf of the Joint
Authority, offers permits to successful applicants who have 30 days to accept or reject the offer
Exploration Permit Granted
NOPTA grants permit on behalf of the Joint Authority
6 Year Exploration Permit in force
Work program permit:
 3 year guaranteed primary work program
 3 year secondary work program (guaranteed upon entry into each year)
Discovery Made
Exploration Permit Renewed
Titleholder can apply to the Joint
Authority for a renewal of the
exploration permit (*in most cases)
The exploration program is successful
and a discovery is made. Titleholder
can apply to the Joint Authority for the
declaration of a location over the
discovery
 50% relinquishment of permit area
 Renewal for 5 years
 Maximum 2 renewals (work
program)
Location Declared
Discontinued
Permit does not continue due to:
 Permit surrendered (conditional
to work commitments)
 Permit cancelled (titleholder
should consider good standing
requirements)
 Permit expires - not renewed
Joint Authority declares location over field.
Within requisite timeframe, explorer can apply
to Joint Authority for a retention lease or
production licence
Not yet Commercial
Retention lease can be granted over
the block(s) in the location if the
discovery is not currently
commercially viable, but is likely to
become so within 15 years
Retention Lease in Force
Retention Lease gazetted by
NOPTA and in force.
 For 5 years with work program
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 Can reapply for further Retention
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Leases but have to prove not
2014
commercially viable, but likely to
be within 15 years
Commercially viable
Production licence can be granted
over the block(s) covering a
commercial discovery; a field
development plan is also required
Production Licence in Force
Production Licence gazetted by
NOPTA and in force
 For life of field while producing
 May be terminated if production
Offshoreceases
Petroleum
Exploration
for more
than 5 years Acreage
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Release
2014 Offshore petroleum titles process
(cash bid)
Area Selection
Areas nominated for release by industry, state/NT governments and Geoscience Australia.
Nominated areas are evaluated and selected for inclusion in a release
Acreage Release
Annual Acreage Release areas announced by the Federal Minister for Industry
(areas clearly identified as available for either work program bidding or for cash bidding)
Call for Cash Bid Applications
The Joint Authority issues an invitation through the Government Gazette for explorers to
(i) prequalify (based on technical and financial competence); then
(ii) bid for areas in the cash bidding round
subsequent closing work program bidding rounds (usually 6 or 12 months)
Cash Bid Auction
Applicants that satisfy the prequalification process are invited to place a cash bid for the area or
areas. The applicant that places the highest cash bid for the area will be offered the permit.
Successful applicants have 14 days to accept or reject the offer.
Exploration Permit Granted
NOPTA grants permit on behalf of the Joint Authority
6 Year Exploration Permit in force
Cash bid permit:
 6 year permit (no work program requirements)
Discovery Made
Exploration Permit Renewed
If permit is renewable - titleholder
can apply to the Joint Authority for a
renewal of the exploration permit
The exploration program is successful
and a discovery is made. Titleholder
can apply to the Joint Authority for the
declaration of a location over the
discovery
 50% relinquishment of permit area
 Renewal for 5 years
 Maximum 1 renewal (cash bid)
Location Declared
Discontinued
Permit does not continue due to:
 Permit surrendered (conditional
to work commitments)
 Permit cancelled (titleholder
should consider good standing
requirements)
 Permit expires - not renewed
Joint Authority declares location over field.
Within requisite timeframe, explorer can apply
to Joint Authority for a retention lease or
production licence
Not yet Commercial
Retention lease can be granted over
the block(s) in the location if the
discovery is not currently
commercially viable, but is likely to
become so within 15 years
Retention Lease in Force
Retention Lease gazetted by
NOPTA and in force.
 For 5 years with work program
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 Can reapply for further Retention
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Leases but have to prove not
2014
commercially viable, but likely to
be within 15 years
Commercially viable
Production licence can be granted
over the block(s) covering a
commercial discovery; a field
development plan is also required
Production Licence in Force
Production Licence gazetted by
NOPTA and in force
 For life of field while producing
 May be terminated if production
Offshoreceases
Petroleum
Exploration
for more
than 5 years Acreage
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Release
Native title rights
Complying with the NTA
Native title is the recognition in Australian law that
Indigenous people had a system of law and ownership of
their lands before European settlement. Where that
traditional connection has been maintained, and where
acts have not extinguished it, native title can be
recognised by the law.
The NTA allows future acts to be done offshore, as long
as the procedural requirements of the future act regime
are complied with. In most cases, native title parties must
be provided with the same procedural rights as other
parties who hold non-native title interests in the offshore
area. In some cases this will amount to a right to be
notified about the proposed grant of a mining or petroleum
tenure. However, it is important to note that the ‘right to
negotiate’ provisions in the NTA do not apply offshore.
Native title is a pre-existing right or interest that may be
present over land and water even if there is no court
determination or native title claim. Native title can also
exist offshore.
Native Title Act 1993
In summary, the Native Title Act 1993 (NTA):

recognises and protects native title;

validates some acts done in the past which may have
been invalid because of the existence of native title;

confirms the extinguishment of native title in some
circumstances;

creates a ‘future act’ regime which sets out conditions
for the doing of acts affecting native title lands or
waters (for example, the grant of a license to produce
petroleum);

enables the relevant parties to enter ‘Indigenous Land
Use Agreements’ to settle any native title issues; and

provides a process by which claims for native title and
compensation can be determined.
Offshore native title
In 2001, the High Court of Australia handed down its
decision in Commonwealth v Yarmirr (the Croker Island
Sea Case). The High Court held that native title can exist
offshore within the limits of Australia’s territorial sea. It is
unclear whether native title can exist in waters seaward of
Australia’s territorial sea.
The High Court held that offshore native title can only be
non-exclusive. This means that native titleholders will not
have the right to exclude others from accessing the sea or
sea bed in the waters where native title exists. The future
act regime also applies to acts done offshore, for example
the grant of a permit to produce petroleum.
Where an act that affects native title has been done, the
native titleholders for the relevant area may be entitled to
compensation. On the current state of the law, it is not
possible to predict the likely quantum of any
compensation.
Native Title and the OPGGSA
The OPGGSA requires that offshore petroleum operations
be carried out in a manner that does not unduly interfere
with other rights and interests, including native title rights
and interests. To this end, the Australian Government
consults with native title parties regarding Acreage
Releases. It is recommended that companies initiate their
own consultative processes to develop good working
relationships with the Indigenous people in the area.
For further information about the NTA contact:
Principal Legal Officer, Future Acts Team Native Title Unit
Attorney-General’s Department
3-5 National Circuit
BARTON ACT 2600 AUSTRALIA
Telephone:
+61 2 6141 4715
E-mail:
native.title@ag.gov.au
Web Page:
www.ag.gov.au
National Native Title Tribunal
GPO Box 9973 Perth WA 6848
PERTH WA 6000 AUSTRALIA
Telephone:
+61 8 9268 7272
E-mail:
enquiries@nntt.gov.au
Web Page:
www.nntt.gov.au
Consistent with the High Court’s decision in the Croker
Island Sea Case, in July 2008 the Attorney-General
announced that in the determination of native title rights
and interests, the Commonwealth was willing to recognise
that non-exclusive native title rights can exist in territorial
waters up to 12 nautical miles. However, such recognition
does not affect or amend obligations arising under the
future acts regime.
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Offshore Petroleum Exploration Acreage Release