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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
OFFSHORE PETROLEUM (ANNUAL FEES) BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Industry, Tourism and Resources,
the Hon Ian Macfarlane, MP)
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OFFSHORE PETROLEUM (ANNUAL FEES) BILL 2005
GENERAL OUTLINE
This Bill sets out the annual fees payable in relation to petroleum exploration permits,
retention leases and production, infrastructure and pipeline licences. The Act
proposed to be created by this Bill is consequential on the repeal of the Petroleum
(Submerged Lands) (Fees) Act 1994 and is its replacement in line with the package of
Bills achieving the rewrite of the Petroleum (Submerged Lands) Act 1967 and
incorporated Acts.
The proposed Offshore Petroleum Act involves a large number of decisions relating
to the day-to-day administration of the Act, including the management of exploration
permits, retention leases and production, pipeline and infrastructure licences.
The proposed Offshore Petroleum (Annual Fees) Act provides that the holders of
these titles (permits, leases and licences) must pay a fee to the Designated Authority
(generally the State or Northern Territory Minister responsible for petroleum
resources) for each year of the term of the title to help recover the costs of the
abovementioned administrative activities. The fee amounts are specified in
regulations.
FINANCIAL IMPACT STATEMENT
In relation to offshore areas adjacent to the States and the Northern Territory, the Bill
has no net financial implications for the Commonwealth as the Offshore Petroleum
Bill provides for amounts equal to the amounts received by the Commonwealth to be
paid to the relevant State or the Northern Territory. This is because the administrative
activities are carried on by the State and Northern Territory Governments on behalf of
the Commonwealth. As it is impossible to predict the number of new or surrendered
titles each year, it is difficult to estimate with precision the amount likely to be
received under these fees in any one year.
NOTES ON INDIVIDUAL CLAUSES
Clause 1 - Short title
This clause is a standard provision setting out the title by which the proposed Act is to
be cited if it becomes law.
Equivalent provision in the PSL Fees Act: section 1.
Clause 2 - Commencement
This clause provides that clauses 1 and 2 would commence on Royal Assent to this
Bill. The remaining clauses and Schedule 1 would commence together with the bulk
of the provisions in the Offshore Petroleum Bill. This is to be on a date fixed by
proclamation. However, a separate proclamation of the Offshore Petroleum (Annual
Fees) Act would not be required.
Equivalent provision in the PSL Fees Act: section 2.
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Clause 3 - Application of Chapter 1 of the Offshore Petroleum Act 2005
The main effect of this clause is that, where terms are used undefined in this Bill, they
could be defined in Chapter 1 of the Offshore Petroleum Bill, in which case they
would have application to this Bill.
Equivalent provision in the PSL Fees Act: section 3.
Clause 4 - Fees
This clause provides that the holder of a work-bid exploration permit, special
exploration permit, retention lease, production licence, infrastructure licence and
pipeline licence is liable to pay an annual fee for each year of the title, starting from
the date of commencement of this provision.
The nature of each of these titles is defined in the Offshore Petroleum Bill. Some
other titles under that Bill do not attract an annual fee. These include cash-bid
exploration permits, because the holder must have tendered a cash payment up front
to secure it. They also include special prospecting authorities and access authorities
because they are generally of short duration, and scientific investigation consents,
which are non-commercial in their character.
Subclause (3) provides that the amount of annual fee payable is to be prescribed in the
regulations, either as a flat amount for that particular title, or as a formula for
calculating it. Subclause (4) provides that the amounts or formulas prescribed for
permits, leases and the various licences may be different, and a different fee or
formula could be set for work-bid exploration permits than for special exploration
permits.
In accordance with Division 1 of Part 4.6 of the Offshore Petroleum Bill, the annual
fee is due and payable 30 days after the day of commencement of the title and the
subsequent anniversary of that day in subsequent years. The explanatory
memorandum notes to Division 1 of Part 4.6 of that Bill set out the reasons why (as a
departure from what appears in the Petroleum (Submerged Lands) (Fees) Act) it has
been decided to exclude from this Bill all collection and penalty provisions and to
place them in the Offshore Petroleum Bill.
Equivalent provisions in the PSL Fees Act: subsection 4(1) and paragraph 4(2)(b)
Technical change: making explicit that different amounts of fee may be prescribed for
the various titles listed in this clause
Clause 5 - Regulations
This clause provides that the Governor-General may make regulations prescribing the
amounts payable as annual fees, or the formulae for calculating them, under each of
the individual paragraphs of subclause 4(1).
Equivalent provision in the PSL Fees Act: section 7.
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Clause 6 - Transitional Provisions
This clause gives effect to the transitional arrangements in Schedule 1. These will
enable annual fees to be determined without interruption or double imposition despite
the repeal of the Petroleum (Submerged Lands) (Fees) Act and its replacement by the
proposed Offshore Petroleum (Annual Fees) Act.
Equivalent provision in the PSL Fees Act: nil.
Schedule 1
Schedule 1 clause 1 - Pre-commencement years
This item provides a seamless transition between the Petroleum (Submerged Lands)
(Fees) Act and the proposed new Act by specifying that the former Act continues to
apply after its repeal to any year of a term of a title that commenced before the former
Act's repeal and has not run its full course at the date of repeal. In that case, only from
the next anniversary of the date of grant of the title is the annual fee to be imposed by
the proposed new Act.
Equivalent provision in the PSL Fees Act: nil.
Schedule 1 clause 2 - Transitional-regulations
This item provides a seamless transition for the effect of regulations prescribing the
level of annual fees under the Petroleum (Submerged Lands) (Fees) Act if and when
that Act is replaced by the proposed new Act. The same fees would apply under the
equivalent provisions of the proposed Act without the regulations needing to be
remade. However, for reasons of good administrative practice, it is planned that new
regulations prescribing the same amounts under the new Act would be drafted in due
course.
The Legislative Instruments Act 2003 provides that legislative instruments made after
1 January 2005 have to be registered in order to be effective, and any legislative
instruments made before 1 January 2005 that are still in force will need to be
registered by a specified date. Legislative instruments include regulations made under
the Petroleum (Submerged Lands) (Fees) Act. At the time the proposed Act comes
into effect, any regulations that have been made to that date under the Petroleum
(Submerged Lands) (Fees) Act will have been registered. Accordingly, paragraph
(2)(b) is relevant in the context of the Legislative Instruments Act only in that the
paragraph ensures that a regulation under the Petroleum (Submerged Lands) (Fees)
Act does not need to be re-registered merely because it has become, by virtue of the
transitional provisions, a legislative instrument pursuant to the new Act.
Equivalent provision in the PSL Fees Act: nil.
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Schedule 1 clause 3 - Re-enactment of the Petroleum (Submerged Lands) Fees Act
1994
This clause will provide a useful means by which other legislation could refer to the
proposed enactment. If other legislation refers to "the Petroleum (Submerged Lands)
Fees Act 1994 or any Act that re-enacts it", that reference will need no change if and
when the proposed new Act comes into effect.
Equivalent provision in the PSL Registration Fees Act: nil.