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1999
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
PETROLEUM (SUBMERGED LANDS) LEGISLATION AMENDMENT
BILL 1999
(Circulated by the authority of the
Minister for Industry,
Science and Resources,
Senator the Hon Nick Minchin)
THIS
MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY
THE HOUSE OF REPRESENTATIVES
TO THE BILL AS INTRODUCED
The proposed amendments to the Petroleum (Submerged Lands) Act
1967 generally relate to improving government administration and the
efficiency of exploration for, and production of, petroleum resources. Many of
these amendments are designed to adapt the Act to the present-day
characteristics of the petroleum industry, economic and technological. This
objective is also a factor behind a number of technical provisions being
repealed with a view to incorporating them in regulations.
The
substantive new provisions in the Bill include the introduction of
infrastructure licences to cater for at-sea operations that do not strictly fall
within the ambit of current production or pipeline licences. An option is also
introduced for the use of supplementary bids to decide between exploration
permit bids that are ranked equal. Additionally, there is the introduction of a
right by submitters of information under the Act to make a declaration which,
unless challenged by the Designated Authority, will determine whether and when
the information may be publicly released. Another notable feature is the
creation of a new offence, namely deliberately interfering with offshore
petroleum operations or installations.
Substantive provisions that will
be repealed by the amendments include the Joint Authority’s discretion to
fix the number of blocks for renewals of exploration permits at 16, the
fragmentation constraints on areas covered by permits being renewed and the 21
year term of pipeline licences.
There are also refinements to some
provisions, such as a modification of the halving rule for permit renewals when
consideration is given to renewing an expiring permit covering 6 blocks or less
and an amendment to ensure that the withdrawal of an applicant before the
awarding of an exploration permit creates fewer complications for the overall
process.
Additionally, a number of minor machinery amendments are made to
update the Act to current legal and administrative practices, specifically in
areas such as the use of approved forms, converting pecuniary penalties in the
Act to penalty units and deleting provisions relating to offences that are fully
dealt with in the Crimes Act 1914.
A consequential amendment is
made to the Petroleum (Submerged Lands) Fees Act 1994 to ensure that the
costs of administering infrastructure licences are covered by fees in the same
way as the costs of administering other titles.
FINANCIAL IMPACT
STATEMENT
There will be no impact on the Commonwealth Budget as the
changes in no way impact on elements such as annual licence fees payable to the
Commonwealth. These fees will apply to pipeline licences and infrastructure
licences with indefinite terms of effect as much as they would if the terms were
limited. The net effect of the amendments is likely to be reduced administrative
costs for both government and industry.
REGULATION IMPACT
STATEMENT
1 Summary of
Proposals
The Minister for Industry,
Science and Resources has agreed to a number of amendments to the Petroleum
(Submerged Lands) Act 1967 (the Act). These amendments do not constitute a
significant change to the existing regime governing the operations of the
petroleum industry in the Australian offshore areas, but are designed to achieve
the objectives listed below. It should be noted that the petroleum industry has
always made it very clear that it wants regulation for surety and has worked
comfortably within the current regime for several decades. The industry has
been heavily involved in the proposed changes to the legislation, which will not
result in any changes to the fundamental principles enshrined in the
Act.
The purpose of the proposed amendments
is to achieve:
• a more streamlined
system for the administration of petroleum exploration and development in
Australia’s offshore
waters;
• clarification of certain
requirements;
• greater certainty and
security for companies which hold, or are seeking to apply for, petroleum titles
in Australia’s offshore
waters;
• a more flexible regime to
accommodate the changes in offshore technology since the Act commenced
operation; and
• improved efficiency
in exploration for, and the production of, petroleum resources while ensuring
the highest operating, safety and environmental standards are
maintained.
Most of the proposed amendments
to the Act are of an administrative nature, such as moving certain provisions
from the Act to Regulations, and clarifying certain provisions. However, there
are 4 which, while not major changes, are of a more substantive nature. These
are:
1. Repeal of ss31(4) and ss31(5) of the
Act to remove the discretionary ‘16 block’
provision.
2. Changes to the term of pipeline
licences.
3. The inclusion of infrastructure
licences, a new class of title to provide secure title over processing, storage
or offloading facilities.
4. Provisions for the
continued use of production facilities in lapsed licence areas, with the
transfer of obligations to parties continuing to use the
facilities.
Title Allocation
System
By way of clarification, the
nature of petroleum titles and their allocation is as follows. The Australian
offshore area has been sub-divided into graticular ‘blocks’ for the
purposes of defining boundaries. Each block is approximately square, and
measures 5 minutes of latitude by 5 minutes of longitude, covering an area of
approximately 67 square kilometres in southern areas and approximately 83 square
kilometres in the northern areas. An exploration permit may vary from a few
blocks to up to 400 blocks while a production licence typically ranges from 1 to
9 blocks. An exploration permit provides the title-holder with the exclusive
right to carry out operations relating to exploration for petroleum within the
boundaries of the permit area. These rights include the right to carry out
seismic surveys, to drill exploration and appraisal wells and to carry out
production tests on any petroleum pools in the permit area. There is a
statutory right to a production licence following the discovery of petroleum,
but certain conditions may apply to that
licence.
Exploration permits are awarded via
an annual or twice yearly acreage release system. Companies bid for permits on
the basis of a work program bidding system under which bidders are required to
propose a minimum guaranteed work program for the term of the permit.
Permittees are primarily selected on the basis of the applicant’s proposed
work program for the first 3 years of the permit as well as on an assessment of
their financial and technical capacity to undertake the proposed work program.
Criteria for selection are applied by administrative guideline and are enforced
through conditions attached to the permit.
When the holder of an exploration permit
discovers petroleum in his permit area, the first step is the declaration of a
location over the blocks covering the likely extent of the petroleum. The Act
provides that within two years of the declaration of a location, the permittee
must apply either for a production licence or a retention lease. A retention
lease entitles the lessee to retain title to certain blocks in a permit area in
which petroleum has been discovered, production of which is not currently
commercially viable but is likely to become so within the 15 years following the
application for the lease.
A permittee may
at his discretion apply for a production licence over all or some of the blocks
in a location. A production licence provides the titleholder the exclusive
right to carry out operations for the recovery of petroleum in the licence area,
including drilling of development wells, installation of production platforms
and processing facilities provided that they are fully located within the
licence area.
Exploration permits, retention
leases and production licences are awarded by the Joint Authority which consists
of the Commonwealth Minister for Industry, Science and Resources and the State
or Northern Territory Minister with responsibility for petroleum matters in the
State/NT adjacent to which the blocks in question are
located.
2 Problem Identification and
Regulatory Objectives
Over the years it
has become evident that a number of provisions in the Act are no longer
appropriate while others place unwarranted burdens on companies and government
by way of unnecessary reporting requirements and approvals. In addition, there
have been technological changes in the petroleum industry and other developments
such as the opening up and growth of liquefied natural gas (LNG) markets.
Further, the outdated provisions do not promote the Government’s
objectives (as set out in the 1998 Resources Policy Statement) of a competitive,
innovative and growing petroleum sector which contributes to rising national
prosperity and which operates in a legislative framework offering high levels of
certainty to all stakeholders about their rights and responsibilities and the
processes of public decision making, including the rules by which they need to
abide.
With these considerations in mind,
the then Department of Primary Industries and Energy, in consultation with the
relevant Departments in the States/Northern Territory and the petroleum
industry, carried out a Review of Offshore Petroleum Legislation extending over
several years from 1990. Options were developed and finally agreement was
reached with these stakeholders on recommendations to improve government
administration of offshore petroleum legislation and the efficiency of
exploration for, and production of, petroleum resources, while ensuring the
continued integrity of operating, safety and environment protection
standards.
The Review, the Report of which
was published in March 1997, focused on administrative decisions, approvals and
company reporting requirements in the Act and subsidiary Acts. Actions were
identified to remove duplication, as were requirements that were considered
inappropriate or unnecessary given the changing nature of the
industry.
The terms of reference for the
review of the petroleum offshore legislation, agreed to in consultation with the
States and the Northern Territory, were:
“(1) Undertake a review of the Petroleum (Submerged Lands) legislation, including related regulations, the Schedule of Directions and Administrative Guidelines, to improve government administration of the legislation and the efficiency of exploration for, and production of, petroleum resources while ensuring that the highest operating, safety and environmental protection standards are maintained;
(a) in particular, the number of government decisions, approvals and company reporting requirements required by both the States/NT and the Commonwealth, are to be examined with a view to a reduction;
(b) the review will be undertaken in close consultation
with the States/NT and industry.”
While
the Act, including the amendments now proposed, will be subject to review in
1999 for compliance with National Competition Policy, it would be inappropriate
to delay the implementation of the amendments now proposed. Apart from the fact
that the newly completed Review has gone on for a considerable period, and that
industry has been given assurances that the implementation of the
recommendations will proceed, there are also a number of amendments which are
crucial to the development of major projects and thus have the potential to
adversely affect the economy if not implemented
now.
3A ‘16 Block’
Provision
Problems/Options
The
objective of the exploration permit system is to facilitate an optimal level of
investment in petroleum exploration in offshore areas under the
Commonwealth’s jurisdiction.
One of the mechanisms employed in the
legislation to achieve this is a requirement that a permittee relinquish half
the blocks covered by the permit at renewal, so that these relinquished areas
may be released again for exploration by other companies. However, holders of
exploration permits may currently, at the Joint Authority’s discretion,
retain up to 16 blocks where the halving process in the Act would otherwise
result in fewer blocks being included in the renewed permit. This has resulted
in large areas being retained by companies for extended periods with consequent
reduction in areas available for competitive bidding by other applicants to
acquire exploration permits.
There are 3
options:
• to leave the situation as
is;
• to lower the number of blocks that
may be retained; or
• to remove the
discretion.
Costs and
benefits
Administrative costs are
neutral for all 3 options. There are no costs to holders of existing titles in
leaving the situation as is, but changing the current situation could constitute
a “cost” to some permittees in that they will no longer be able to
retain exploration areas indefinitely.
There is no real benefit, apart from that
to existing titleholders, in leaving the situation as is. The principal benefit
of changing the situation is the removal of the potential for large areas to be
sterilised from exploration for a considerable period, and a consequent
stimulation of exploration activity in extensive areas of mature prospective
basins. This will provide more opportunities for petroleum companies generally,
and hence lead to the potential for a higher level of exploration (and thus
greater investment) in offshore areas. In addition, removal of the discretion
would result in a more certain outcome in that the situation is established by
law and applies equally to all parties.
Feedback from
Consultations
While industry, through
the Australian Petroleum Production and Exploration Association (APPEA),
accepted that they would no longer be able to retain exploration acreage
indefinitely, they proposed that, for existing permits, 4 blocks should be the
minimum size of a reduced permit on the basis that some fields underlie more
than one or two blocks. This was accepted by all parties as a reasonable
outcome, and, with some qualifications, is also proposed to be adopted for new
permits.
Conclusion
Taking the above considerations into account,
it was decided to adopt a combination of the latter two options, such that the
discretion is removed but the minimum permit area size will be 4 blocks after
halving. This would remove the bias in favour of existing explorers in mature
acreage over new entrants, while at the same time providing for a sufficiently
large minimum permit size to allow a meaningful exploration program. The
discretionary minimum of 16 blocks for new permits is to be removed and the
discretion for existing permits is to be removed after they have been renewed
for the next permit term. Once a permit has reduced to 4 blocks it will be
renewable twice over up to 4 blocks (instead of one renewal of 4 and the
following renewal of 2 blocks). A one block permit will not be able to be
renewed.
Companies with existing permits
would not feel the impact of this change for at least 5 years and up to 10 years
for recently renewed permits. In addition to the benefits noted above,
exploration will also be stimulated by the impetus on existing permittees to
explore more aggressively prior to having to surrender blocks.
3B Changes to the term of Pipeline
Licences
Problems/Options
A
pipeline licence is generally of 21 years’ duration, unless the Joint
Authority considers that the pipeline will not be required for that length of
time, in which case the licence can specify a shorter period. In 1998, the term
of a new production licence was made indefinite as part of a small number of
urgent amendments made to the Act. For administrative reasons, a proposal to
likewise extend the term of a pipeline licence was not able to be presented at
the time.
All parties considered it would be
appropriate to treat the term of a pipeline licence in the same way as that of a
production licence. Accordingly, a change to an indefinite term for a pipeline
licence is proposed.
The objective behind
the proposed changes is to provide greater flexibility in the use of pipelines
for more than one petroleum development.
The
options are to:
• leave the
provisions as they are; or
• establish an
indefinite term for a pipeline licence.
Costs and
benefits
As in the case of indefinite
term production licences, the administrative costs for both government and
industry will be reduced by the removal of fixed term pipeline licences.
However, these costs are impossible to quantify.
A change to the current provisions will
provide for greater flexibility than exists at present and has cost advantages
and benefits over the first option.
Feedback from
Consultations
APPEA indicated full
support for the proposed changes to pipeline licence
provisions.
Conclusion
It
was decided that the Act should be amended such that the term of the pipeline
licence and any renewed pipeline licence be indefinite but that the licence be
able to be terminated five years after the pipeline ceases to be used. This
period could be extended by the Joint Authority. The Act will also require the
pipeline licence holder to maintain the pipeline, and these changes will make
clear the rights and obligations of the pipeline licence holder in this
respect.
3C Inclusion of a new class of
title for production related
facilities
Problems/Options
The
Act does not provide for the licensing of offshore facilities for processing,
nor does it provide for cases where storage or offloading facilities are not
part of the actual production facility within a relevant production licence
area. For example, there is currently a proposal that a production facility be
located in Australia’s offshore waters but outside its associated
production licence area. In offshore areas, companies are also examining options
for the installation of gas processing facilities producing LNG or
methanol.
Companies are reluctant to invest
in a platform or processing plant unless they have security of title over the
area in which it is to be located.
The only
available solution is to provide companies with such certainty by an appropriate
amendment to the Act.
Costs and
benefits
Any administrative costs
associated with the new class of licence would be recovered via fees which are
provided for via an amendment to the Petroleum (Submerged Lands) Fees Act
1994.
The benefits are greater
flexibility for companies both in the location of processing and other
facilities associated with the production of petroleum, and in utilising new
technology such as offshore LNG or methanol processing
facilities.
Feedback from
consultations
Both industry and the
States/NT support this proposed
amendment.
Conclusion
This
amendment is supported by all parties. Its implementation will result in
greater certainty for industry and a more flexible
regime.
3D Provisions for the continued
use of production facilities in lapsed licence
areas
Problems/Options
There
are a number of production licences in Bass Strait which have been in existence
since the late 1960s/early 1970s which are coming to the end of their producing
lives. The facilities on a number of the platforms in a number of these
production licence areas are being used to produce petroleum in adjacent licence
areas, for example, via the use of horizontally drilled wells and the use of
subsea completions connected back to the platform. Continuing improvements in
technology mean that this trend is likely to increase in the coming years, with
many of the smaller, previously uneconomic fields now becoming viable. In other
cases larger platforms are used as a gathering and initial processing point for
oil and gas produced from smaller adjacent facilities before being pipelined to
an onshore processing plant.
Production of petroleum from the licence areas
in which some of these platforms are located could cease within the next few
years, in which case the production licence would normally lapse at the end of
its term. Any associated facilities could not then continue to be used to
produce petroleum from fields outside the original licence
area.
The options are
to:
• leave the situation as is;
or
• enable the continued use of
production facilities in lapsed production licence areas where they are of use
in facilitating production and transport of
petroleum.
Costs and
benefits
There are no cost differentials
for government associated with the identified options. However, the second
option is likely to result in substantial savings to companies in their being
able to make use of existing
facilities.
There are no benefits in leaving
the situation as is. The major benefit of the other option is that it will
enable petroleum, which might otherwise not be commercially viable to produce,
to be recovered or to continue to be recovered from nearby licence areas. This
will result in greater returns to the Commonwealth and the
companies.
Feedback from
consultations
Industry supports the
proposal.
Conclusion
Enabling
the continued use of production facilities in lapsed production licence areas
will provide for greater flexibility and will give companies certainty in
planning for the development of smaller and/or marginal fields and the
continuing development of other fields. Further it will improve the economics
of developing other fields, with a consequent higher return to Commonwealth
revenue.
4 Consultation
The
review was carried out in co-operation with the States/Northern Territory
through the Australian and New Zealand Minerals and Energy Council (ANZMEC)
Sub-committee on Petroleum, and also with the petroleum industry. Industry
bodies consulted were the Australian Petroleum Production and Exploration
Association (APPEA) and the Australian Mining and Petroleum Law Association
(AMPLA).
5 Implementation and
Review
Implementation of the proposals
will be via amendments to the Petroleum (Submerged Lands) Act 1967 and
administration of the changes will be undertaken by existing
staff.
Industry has been consulted in the
legislative drafting of the proposals. The State/NT Departments which jointly
administer the Act on behalf of the Commonwealth have also been consulted.
Amendments mirroring the changes to the Commonwealth Act will be included by the
States/NT in their corresponding legislation in due
course.
The amendments will be included in
the 1999 review of the Petroleum (Submerged Lands) Act under the
Commonwealth’s legislation review program.
Part 1 - PRELIMINARY
Provides for the Act to be cited as the Petroleum
(Submerged Lands) Legislation Amendment Act 1999.
Subclause 2(1) provides for commencement of the Bill on Royal Assent.
Subclause 2(2) provides that certain items are to commence on a day to
be fixed by Proclamation.
Subclause 2(3) provides that if the items set
out in subclause 2(2) are not proclaimed, they will commence 6 months after the
Act receives Royal Assent. These items repeal certain provisions of the existing
Act with a view to incorporating them in Regulations. It is necessary to have
these new Regulations in place when the repeal comes into
effect.
Clause 3 – Schedule(s)
This clause makes it
clear that two Acts are to be amended by the Bill and the amendments in respect
of each Act are presented in a separate Schedule to the Bill.
Part 2 – AMENDMENT OF THE PETROLEUM (SUBMERGED LANDS) ACT 1967
Items 1, 2, 3, 4, 5 and 6 - Subsection 5(1)
These clauses
define a “facility”, “good processing and transport
practices”, “infrastructure facilities”, “infrastructure
licence”, “infrastructure licence area” and
“infrastructure licensee”. These terms do not appear in the existing
Act.
Item 7 - Subsection 5(1) (definition of registered
holder)
This item inserts a definition of the registered holder
of an infrastructure licence.
Item 8 - Subsection 5(1) (at the end of
paragraphs (a), (b), (c), (ca) and (d) of the definition of the relinquished
area)
This item makes minor editorial amendments to clarify the
definition of the relinquished area.
Item 9 - Subsection 5(1) (after
paragraph (ca) of the definition of the relinquished
area)
This item inserts a definition of the relinquished area in
relation to an infrastructure licence. This area needs to be defined because of
existing requirements that holders of titles who relinquish areas take steps to
remove their property from those areas.
Item 10 - Subsection
5(2)
This item extends to infrastructure licences the definition
given in this subsection to the term of other titles under the Act, ie that it
is the period during which the title remains in force.
Item 11 -
Subsection 5(2)
This item deletes the definition in this subsection
of the date of expiration of a pipeline licence. The definition is rendered
superfluous by the new provision under item 67 making the term of a pipeline
licence indefinite.
Item 12 - Subsection 5(3)
This item
extends to infrastructure licences the definition given in this subsection to a
year of the term of other titles under the Act, ie that it is a period of one
year commencing on the day on which the title comes into force or on any
anniversary of that day.
Item 13 - Subsection 5(6)
This
item repeals the definition of the renewal of a pipeline licence. The definition
is rendered superfluous by the new provision under item 67 making the term of a
pipeline licence indefinite.
Item 14 - Subsection 5(8)
This
item extends to infrastructure licences the provision in this subsection whereby
any reference to a title under the Act is a reference to that title as varied
for the time being under the Act.
Item 15 - Section 5AAA
The
existing section 5AAA in the Act provides that the boundaries of existing
pipeline licences are not affected by changes to the territorial sea baselines.
This item substitutes a new section 5AAA such that the same protection is also
conferred on existing exploration permits, retention leases, production licences
and infrastructure licences. The amendments will be analogous to those made in
1996 to the Offshore Minerals Act 1994.
This item also inserts new
section 5AAB setting out the nature and purpose of infrastructure facilities.
Infrastructure facilities can be at-sea facilities of all kinds except those
that float with no direct or indirect tethering or connection to the seabed. The
purposes for which the facilities may exist are one or more of the specific
purposes listed in subsection (2) or an activity related to any of them.
However, infrastructure facilities cannot exist for actual petroleum exploration
or recovery operations except to the extent of using such facilities to remotely
control other facilities engaged in those operations.
Items 16 and
17 - Subsection 18(1) and Section 18
These items extend the Joint
Authority’s current power to make declarations reserving specific blocks
to include the power to reserve them from the grant of an infrastructure
licence.
Item 18 - Subsection 19(1) (penalty)
This item
reimposes the current imprisonment penalty for exploration for petroleum in
contravention of the Act but deletes the pecuniary penalty in view of the fact
that pecuniary penalty is now automatically linked to the term of imprisonment
in accordance with the formula set out in section 4B of the Crimes Act
1914.
Item 19 - Paragraph 21(1)(a)
This item repeals the requirement that applications for exploration
permits need to be submitted in accordance with an approved form. Under current
administrative procedures, this is considered
unnecessary.
Item 20 - After section 21
This item adds a new section 21A to enable the Joint Authority to
rank bids for exploration permits, exclude undeserving bids from the ranking
and, if two or more parties have tendered the best and equal work program bids,
invite them to submit supplementary bids as a further basis for the selection of
a successful applicant. The purpose of the new section is to enable the field of
applicants to be revisited if a permit offer is not taken up or if two or more
applicants are initially deemed best and equal. Under the existing provisions,
in these situations the Joint Authority would need to issue a new public
invitation for permit applications and recommence the entire process.
Item 21 - After section 22
This item inserts sections new
22AA, 22AB and 22AC which deal with the implications of permit applicants
withdrawing before the grant of the permit and of applications lapsing (ie an
offer not being taken up within the specified period). If the application
withdrawn is one in respect of which the Joint Authority has already made an
offer of permit, these sections enable the Joint Authority to fully revisit the
selection procedure, ie in most respects the situation returns to what obtained
when all the other applications were first received. In the case of a joint
application, if one or more of the parties wish to withdraw, the application
remains in effect for the remaining party/parties, but only if all parties to
the application agree to the withdrawal. In that case, the remaining party or
parties do not benefit from any offer of a permit that may already have been
made, but the application is reassessed in competition with any other
applications. However, if one or more parties withdraw from a joint application
without the approval of all the other parties, the application, if it leads to
an offer of a permit, will lapse because not all the original parties will be
able to accept the offer.
Item 22 - Paragraph
23(4)(a)
This item refers to applications for exploration permits in
respect of blocks surrendered, cancelled or determined from a lease, licence or
another permit. The clause repeals the requirement that applications for permits
for such blocks need to be submitted in accordance with an approved form. Under
current administrative procedures, this is considered
unnecessary.
Item 23 - Paragraph 24(3)
This item
repeals discretionary refunds of application fees to successful bidders who
reject offers of grant.
Items 24, 25, 26 and 27 - Subparagraph
25(5)(b)(ii), Paragraph 26(1)(b), Paragraph 26(2)(b), and Paragraph
27(b)
These items omit mentions of the instalment payment facility
for cash bids for a permit in respect of surrendered blocks because this
facility, provided for in section 109, is repealed under item
130.
Item 28 - At the end of section 29
This item refers
to location blocks (ie blocks in which a petroleum pool or part thereof has been
discovered and declared). The item provides for an exploration permit to
continue in force in relation to any location blocks at the end of the final
renewal term of the permit until the application for a retention lease or
production licence is resolved. The resolution may take the form of the lease or
licence being granted, the applicant withdrawing, the application lapsing or the
application being refused. However, if a lease application is refused, under
subsection 39A(6) of the Act the applicant has 12 months to apply for a
licence. In that case, this item also extends the permit for that
period.
Item 29 - Paragraph 30(2)(a)
This item repeals the
requirement that applications for the renewal of an exploration permit need to
be submitted in accordance with an approved form. Under current administrative
procedures, this is considered unnecessary.
Items 30 and 31-
Subsection 31(1) and Subsections 31(3) to (6)
These items relate to
the halving rule for exploration permit renewals, fragmentation constraints on
the areas covered by permits being renewed and the 16 block discretionary
minimum size of permit areas. At each renewal, the number of blocks covered by
the renewed permit shall in principle be half the number of blocks over which
the previous permit applied. If the previous permit applied over an uneven
number of blocks, a formula provides for the permittee to qualify for a number
of blocks equal to half the nearest number divisible by 4. These items amend
this rule by revoking the possibility of the permittee applying for renewal over
a one block permit and compensating for the possible shortening of the renewal
series by making the minimum size of an area 4 blocks, with one extra renewal of
that number of blocks. However, 2 or 3 block permit areas can come to exist in
other ways (eg voluntary surrender of some of the blocks in an area), and the
same principle of one renewal of that number of blocks is applied to them.
These items also repeal the fragmentation constraints which stipulate
that each area is to consist of blocks having a side in common with at least one
other block and that, if the total number of blocks is 16 or more, then each
area needs to consist of at least 16 blocks so connected. The Joint
Authority’s discretionary power to fix the number of blocks for renewal at
16 is also repealed.
Item 32 - Saving
This item saves the
Joint Authority’s discretion to fix the number of blocks at 16 for one
more renewal in the case of permits existing at the date of effect of the
repeal.
Items 33, 34 and 35 – At the end of subsection 34(1),
Subsections 34(2) and (3) and the penalty and Section 35
Section 34
provides that, on discovery of petroleum, the permittee must notify the
Designated Authority (ie the relevant State Minister) of the discovery, and
thereafter, if directed, provide further information such as the chemical
composition and physical properties of the petroleum and details about the
nature of the subsoil. Section 35 provides that the Designated Authority may
direct the permittee to undertake further work to obtain this information. While
it is considered appropriate to retain in the Act subsection 34(1) requiring the
permittee to notify the Designated Authority of any discovery and the penalty
for failing to do so, the remaining provisions in these sections are technical
in nature and more appropriately covered by regulations under the Act.
Subsections 34(2) and (3) and section 35 are therefore repealed by these
items.
Item 36 - At the end of section 37
This item
adds subsection (7) clarifying the Joint Authority’s power to form an
opinion based on information from any source about whether blocks nominated by a
permittee actually cover or extend into a petroleum pool.
Item 37 -
Paragraph 38A(2)(a)
This item repeals the requirement that
applications for retention leases need to be submitted in accordance with an
approved form. Under current administrative procedures, this is considered
unnecessary.
Item 38 - Subsection 38B(1)
This item amends
section 38B dealing with the procedure for the grant or refusal of a retention
lease. Currently, if there is an application for a retention lease in respect of
certain specified blocks constituting a location, then the Joint Authority has
to take an “all or nothing” decision on granting a lease over those
blocks. The substituted paragraph 38B(1)(c) will enable the Joint Authority,
where appropriate, to grant a lease over a subset of the blocks nominated in the
application, leaving the remainder of the nominated blocks under the continued
coverage of an exploration permit, if one is in force. The subset selected for a
lease will consist of the blocks about the status of which the Joint Authority
is satisfied, specifically to the effect that the blocks contain petroleum and
that its recovery is not at the time of the application commercially viable but
is likely to become viable within 15 years.
Item 39 - Paragraph
38B(2)(b)
This item inserts a qualification to subsection 38B(2)
reinforcing the amendment in the above item by clarifying that it is only if the
Joint Authority is unsatisfied about the status of every block referred to in
the application for a lease that the Joint Authority is obligated to refuse the
grant of a lease to the applicant.
Item 40 - After subsection
38B(2)
This item provides that refusal of a lease in respect
of any block(s) (but not all blocks) in a lease application requires the Joint
Authority to serve a refusal notice in writing on the applicant in respect of
that or those blocks .
Item 41 - Paragraph 38F(2)(a)
This
item repeals the requirement that applications for the renewal of retention
leases need to be submitted in accordance with an approved form. Under current
administrative procedures, this is considered unnecessary.
Items 42,
43 and 44 – At the end of subsection 38J(1), Subsections 38J(2) and (3)
and the penalty and Section 38K
Section 38J provides that, on
discovery of petroleum in a lease area, the lessee must notify the Designated
Authority (ie the relevant State Minister) of the discovery, and thereafter, if
directed, provide further information such as the chemical composition and
physical properties of the petroleum and details about the nature of the
subsoil. Section 38K provides that the Designated Authority may direct the
lessee to undertake further work to obtain this information. While it is
considered appropriate to retain in the Act subsection 38J(1) requiring the
lessee to notify the Designated Authority of any discovery and the penalty for
failing to do so, the remaining provisions in these sections are technical in
nature and more appropriately covered by regulations under the Act. Subsections
38J(2) and (3) and section 38K are therefore repealed by these
items.
Item 45 - Section 39 (penalty)
This item reimposes
the current imprisonment penalty for recovery of petroleum in contravention of
the Act but deletes the pecuniary penalty in view of the fact that pecuniary
penalty is now automatically linked to the term of imprisonment in accordance
with the formula set out in section 4B of the Crimes Act
1914.
Item 46 - Paragraph 41(1)(a)
This item
repeals the requirement that applications for production licences need to be
submitted in accordance with an approved form. Under current administrative
procedures, this is considered unnecessary.
Item 47 - Subsection
43(1)
Currently, if there is an application for a production licence
in respect of certain specified blocks constituting a location, then the Joint
Authority has to take an “all or nothing” decision on granting a
lease over those blocks. Complementing the amendments under item 38 to
subsection 38B(1), this item adds provisions whereby the grant of a production
licence may be made over a subset of the blocks nominated in the application,
leaving the remainder of the nominated blocks under the continued coverage of an
exploration permit, if one is in force. The subset selected for the licence will
consist of the blocks about the status of which the Joint Authority is
satisfied, specifically to the effect that the blocks contain
petroleum.
Item 48 - Subsection 43(2)
This item makes a
minor editorial amendment consequential on the previous item.
Item 49
- At the end of section 43
This item requires a notice of refusal of
a licence to be served on the applicant if the Joint Authority decides not to
grant the applicant a licence in respect of the block or any of the blocks
specified in the application. The refusal may arise where the applicant has
failed to furnish the Designated Authority with further information as required
by a written notice served under subsection 41(2) or because the Joint Authority
is not satisfied that the block or any of the blocks contain petroleum.
Item 50 - Subsection 44(2)
This item
clarifies that, when an instrument of offer of a licence is issued by the Joint
Authority, it will not necessarily cover all the blocks included in the
application. Rather, the licence offer will apply only in respect of the blocks
specified in the instrument. These blocks will be blocks about the status of
which the Joint Authority is satisfied, specifically to the effect that the
blocks contain petroleum.
Item 51 - Subsection 45(1)
This
item refers to a variation of a licence adding to the licence area blocks that
the licence holder had previously chosen to forego. This item specifies that any
blocks the Designated Authority may add to the licence must be blocks about the
status of which the Joint Authority is satisfied, specifically to the effect
that the blocks contain petroleum.
Item 52 - Paragraph
47(6)(a)
This item repeals the requirement that applications
for production licences in respect of surrendered, cancelled or determined
blocks need to be submitted in accordance with an approved form. Under current
administrative procedures, this is considered unnecessary.
Item 53 -
Subsection 48(3)
This item refers to the deposit paid by applicants
for surrendered, cancelled or determined blocks. The clause repeals the
discretional refundability of this deposit to successful bidders who reject the
offer of a production licence over such blocks.
Items 54, 55, 56 and
57 - Subparagraph 49(5)(c)(ii), Paragraph 49(6)(b), Paragraph 49(7)(b) and
Paragraph 50(b)
These items omit mentions of the instalment payment
facility for cash bids for a licence in respect of surrendered blocks because
this facility, provided for in section 109, is repealed under item
130.
Item 58 - Paragraphs 51(2)(a) and 54(2)(a)
This
item repeals the requirements that applications for production licences in
respect of individual blocks and the renewal of production licences need to be
submitted in accordance with an approved form. Under current administrative
procedures, this is considered unnecessary.
Item 59 - After Division 3
of Part III
This item inserts the new Division 3A –
Infrastructure licences.
Under “59A Construction etc. of
infrastructure facilities”, the item extends to infrastructure facilities
the provision that applies to production facilities and pipelines, making it an
offence to do anything for the construction or operation of those facilities
except under and in accordance with the relevant licence, in this case an
infrastructure licence. The words “or as otherwise permitted by this
Part” relate to the fact that some of the activities to be permitted under
an infrastructure licence are permitted under other titles, but only inside the
area covered by the title, eg storing petroleum in a production licence area.
These words make it clear that these rights are to remain intact. The penalty
for an offence under this section is to be equal to that applying to
unauthorised petroleum exploration, production and pipeline
construction.
Under “59B Application for infrastructure
licence”, the item inserts a section specifying the process for submitting
an application for an infrastructure licence which is analogous to the process
set out in the Act for submitting a production licence application.
Under
“59C Notification as to grant of an infrastructure licence”, the
item inserts a section specifying the process for notifying a successful
infrastructure licence applicant which is analogous to the process set out in
the Act for notifying a successful production licence applicant.
Under
“59D Notices to be given by Joint Authority”, the item inserts a
section specifying the consultation process with third parties that needs to be
gone through before an offer of an infrastructure licence is made. This
procedure is largely analogous with the consultation procedure that is currently
gone through before access authorities are granted under section 112 of the Act.
The difference is that, since special prospecting authorities and access
authorities tend to be relatively short term titles, holders of these titles
will not need to be consulted if the title will expire before any construction
or operation of facilities under the proposed infrastructure licence would
occur. The section also provides that the consultation process may be waived by
any of the third parties having an interest in the block consenting in writing
to the grant of the infrastructure licence. The consultation procedure reflects
the concept that plans for infrastructure licences should create minimum
disturbance for other title-holders in the area.
Under “59E Grant
of infrastructure licence”, the item inserts a section specifying the
process for accepting an offer of an infrastructure licence which is analogous
to the process set out in the Act for accepting an offer of a production
licence.
Under “59F Rights conferred by infrastructure
licence” the item inserts a statement of rights conferred by an
infrastructure licence by referring to the construction and operation of
infrastructure facilities (section 5AAB inserted by item 15 refers). It is also
made clear that an infrastructure licence is not a pre-requisite for doing
anything that is permitted under an exploration permit, lease, production
licence or pipeline licence.
Under “59G Term of infrastructure
licence” the item provides an indefinite term for an infrastructure
licence subject to compliance with all other requirements in Part III of the
Act.
Under “59H Termination of licence if no use of facilities for
5 years”, the item gives the Joint Authority power to terminate an
infrastructure licence which is analogous to the power to terminate a production
licence. This power is exercisable in cases where, for a continuous period of at
least 5 years, there has been no construction work on the facilities. After
the facilities have been constructed, the power is also exercisable where there
has been no use of the facilities for a similar period. In calculating the date
at which the power to terminate an infrastructure licence may be invoked,
periods when construction or use was precluded by force majeure are to be
disregarded.
Under “59J Conditions of infrastructure
licence”, the item gives the Joint Authority power to grant infrastructure
licences subject to such conditions as the Joint Authority thinks fit and are
specified in the licence. This power is identical to the Joint Authority’s
power to attach conditions to other titles granted under the Act, ie exploration
permits, retention leases, production licences and pipeline licences.
Under “59K Variation of infrastructure licence”, the item
establishes a process for the variation of an infrastructure licence which is
analogous to the process for varying an access authority except where holders of
special prospecting authorities and access authorities are involved whose title
will expire before any construction or operation of facilities under the
proposed infrastructure licence would occur.
Item 60 - Subsections
60(2) and (3)
These subsections relate to the regulation of water
lines, secondary lines, pumping stations, tank stations and valve stations.
Owing to the technical nature of these provisions, it is appropriate that they
be moved to regulations under the Act and the subsections are therefore
repealed.
Items 61 and 62 - Subsection 60(4) and Subsection
60(5)
These items delete from subsections 60(4) and 60(5) all
mentions of secondary lines and water lines. Owing to the technical nature of
these provisions, it is appropriate that they be moved to regulations under the
Act. After the deletions, these subsections cover only the operation of
pipelines and remain otherwise unchanged.
Item 63 - Section 60
(penalty)
This item reimposes the current imprisonment penalty for
constructing or operating a pipeline in contravention of the Act but deletes the
pecuniary penalty in view of the fact that pecuniary penalty is now
automatically linked to the term of imprisonment in accordance with the formula
set out in section 4B of the Crimes Act 1914.
Items 64 and 65 -
Paragraph 61(a) and Subsections 62(1) and (2)
These items delete from
paragraph 61(a) and subsections 62(1) and (2) all mentions of water lines,
secondary lines, pumping stations, tank stations and valve stations. Owing to
the technical nature of these provisions, it is appropriate that they be moved
to regulations under the Act. After the deletions, section 61 covers only acts
done in an emergency to maintain a pipeline and section 62 covers only the
Designated Authority’s powers to direct alterations to, or removal of,
pipelines constructed or reconstructed in contravention of the Act.
Item
66 - Paragraph 64(1)(a)
This item repeals the requirement that
applications for pipeline licences need to be submitted in accordance with an
approved form. Under current administrative procedures, this is considered
unnecessary.
Item 67 - Subsection 67(1)
This item makes the
term of a pipeline licence indefinite subject to other provisions in Part III of
the Act, most notably the new provisions in section 67A.
Item 68 -
Application
This item clarifies that the indefinite term will apply
to existing as well as new pipeline licences. It will also apply to a pipeline
licence that has nominally expired but, under subsection 69(8), is deemed to
continue in force for the time being because no decision has yet been made by
the Joint Authority on a renewal application or because the licensee has not yet
accepted an offer of renewal.
This item inserts the new section 67A “Termination of pipeline
licence if no operation for 5 years”.
This section gives the Joint
Authority power to terminate a pipeline licence which is analogous to the power
to terminate a production licence or infrastructure licence. This power is
exercisable in cases where, for a continuous period of at least 5 years, there
has been no construction work on the pipeline. After the pipeline has been
constructed, the power is also exercisable where there has been no use of the
pipeline for a similar period. In calculating the date at which the power to
terminate an infrastructure licence may be invoked, periods when construction or
use was precluded by force majeure are to be disregarded
Item 70 -
Sections 68 and 69
This item repeals sections 68 and 69 which lay
down procedures respectively for pipeline licence renewal applications and the
grant or refusal of pipeline licence renewals. Since pipeline licences will no
longer be subject to renewal, these sections become superfluous.
Item
71 - Subsection 70(3)
This item repeals subsection 70(3), which gives
the Joint Authority power to vary conditions in a pipeline licence when it is
renewed. Since pipeline licences will no longer be subject to renewal, this
subsection becomes superfluous.
Item 72 - Saving
This item
saves any conditions attached to a pipeline licence that had been introduced as
variations under subsection 70(3) immediately before the repeal of the
subsection.
Item 73 - Paragraph 71(2)(a)
This item repeals
the requirement that applications for the variation of a pipeline licence need
to be submitted in accordance with an approved form. Under current
administrative procedures, this is considered unnecessary.
Item 74 -
Subsection 72(1)
This item deletes from subsection 72(1) mentions of
water lines, secondary lines, pumping stations, tank stations and valve
stations. Owing to the technical nature of these provisions, it is appropriate
that they be moved to regulations under the Act. After the deletions, section 72
covers only the process for variation of a pipeline licence by the Joint
Authority and remains otherwise unchanged.
Item 75 - Subsection 72(2)
(penalty)
This item reimposes the current imprisonment penalty for
failure to comply with a direction given under section 72 to make changes in the
design, construction, route or position of a pipeline, but deletes the pecuniary
penalty in view of the fact that pecuniary penalty is now automatically linked
to the term of imprisonment in accordance with the formula set out in section 4B
of the Crimes Act 1914.
Item 76 - Subsection 74(1)
(penalty)
This item reimposes the current imprisonment penalty for
ceasing to operate a pipeline in contravention of the Act, but deletes the
pecuniary penalty in view of the fact that pecuniary penalty is now
automatically linked to the term of imprisonment in accordance with the formula
set out in section 4B of the Crimes Act 1914.
Item 77 - Section
75
This item brings infrastructure licences within the definition of
“title” under Part III Division 5. Permits, leases, production
licences, pipeline licences and access authorities are already considered as
titles under the Division. This inclusion means the provisions of the Division
in relation to the registration of instruments will apply to infrastructure
licences.
Item 78 - At the end of paragraphs 76(2)(a) and
(b)
This item makes minor editorial amendments to clarify the
subsection.
Item 79 - After paragraph 76(2)(b)
This item adds a provision to the effect that the Designated
Authority is to enter in the Register a memorial in respect of each
infrastructure licence setting out particulars of the infrastructure licence
area.
Item 80 - At the end of paragraphs 76(2)(c), (d) and (e)
This item makes minor editorial amendments to clarify the
subsection.
Item 81 - Paragraph 76(2)(g)
This item provides
that the Designated Authority also has power to enter in the Register such
further matters relating to the registered holder or to the terms and conditions
of an infrastructure licence as the Designated Authority deems proper and
expedient in the public interest.
Item 82 - Paragraph
76(3)(c)
This item deletes mention of an agreement for payment by
instalments for cash bids for a licence in respect of surrendered blocks because
this facility, provided for in section 109, is repealed under
item
130.
Item 83 - Subparagraph 81A(4)(a)(i)
Section 81A
refers to a dealings in relation to titles that may in the future come into
existence and the prescribed period during which a person who is party to such a
dealing may lodge a provisional application for Joint Authority approval of the
dealing. This item provides that the prescribed period in respect of a dealing
in an infrastructure licence will commence on the day the Joint Authority serves
an instrument on the applicant for the infrastructure licence informing that the
Joint Authority is prepared to grant the infrastructure licence. The prescribed
period will end on the day the infrastructure licence comes into
existence.
Item 84 - Subsection 82(1) (penalty)
Section 4AB
of the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to making to the Designated
Authority false or misleading statements in instruments related to dealings.
Item 85 - Sections 84, 85 and 90 (penalty)
Section 4AB of
the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to making false or misleading
statements in information required by the Designated Authority in relation to
dealings, failing to produce documents required by the Designated Authority,
making false entries in the Register or producing documents falsely purporting
to be extracts from the Register.
Item 86 - Paragraphs 94(a) and
(b)
Section 94 provides for publication in the Gazette of
information about applications, grants, renewals, variations, surrenders,
cancellations, determinations and expiry of titles, as appropriate and specified
in the section. This item inserts a provision that, in addition to the grant or
variation of other titles, the grant or variation of an infrastructure licence
is to be notified in the Gazette. It also deletes the requirement that
the renewal of a pipeline licence needs to be notified. This is rendered
superfluous by the amendment in item 67 making the term of a pipeline licence
indefinite.
Item 87 - At the end of paragraph 94(c)
This item makes a minor editorial amendment to clarify the
section.
Item 88 - After paragraph 94(c)
This item inserts
a provision into section 94 for the surrender or cancellation of an
infrastructure licence to be notified in the Gazette.
Item
89 - At the end of paragraph 94(d)
This item makes a minor editorial
amendment to clarify the section.
Item 90 - Paragraph 94(e)
This item deletes the requirement that an application for the
renewal of a pipeline licence needs to be notified in the Gazette. This
is rendered superfluous by the amendment in item 67 making the term of a
pipeline licence indefinite.
Item 91 - Paragraph 94(g)
This item inserts a requirement that particulars of the termination
of a production licence, infrastructure licence or pipeline licence are to be
published in the Gazette. It also deletes mention of the expiry of a
pipeline licence, which is rendered superfluous by the amendment in item 67
making the term of a pipeline licence indefinite.
Item 92 - After
subsection 95(2)
This item inserts a subsection specifying that the
date of effect of the surrender or cancellation of an infrastructure licence is
the day on which notice is published in the Gazette.
Item 93 -
Subsection 95(4)
This item extends to infrastructure licences the
provision that already applies to production licences and pipeline licences that
the date of effect of a variation of the licence is the day on which notice of
the variation is published in the Gazette.
Items 94 and 95 -
Subsections 96(1) and (2)
These items provide that the same
requirements will apply to infrastructure licensees as apply to holders of other
titles in relation to the commencement of work or operations. Specifically, if
work or operations are a condition of the infrastructure licence, the work or
operations must be commenced within 6 months of the day the infrastructure
licence comes into force except where the Designated Authority otherwise
directs.
Item 96 - Section 96 (penalty)
Section 4AB of the
Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure to comply with a
direction by the Designated Authority to commence works or operations as
provided under section 96.
Item 97 - After subsection 97(2)
This item inserts subsection (2A) requiring operations under an
infrastructure licence to be carried out in a safe manner and in accordance with
good oil field, processing and transport practices, as defined in item 2 and
elsewhere in the existing Act. The item also inserts subsection (2B) requiring
the infrastructure licensee to prevent the waste or escape, and control the
flow, of substances from a facility that has been constructed under the licence,
except where this is specifically authorised, for instance for a
“dewatering” plant. These requirements are consistent with the
requirements imposed by section 97 on holders of other titles under the
Act.
Item 98 - Section 97 (penalty)
Section 4AB of the
Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure to comply with
good work practices as required by section 97.
Item 99 - Subsections
97A(1), (3) and (4)
This item extends to infrastructure licensees
the requirement that already applies to other title-holders whereby they must,
as directed by the Designated Authority, maintain specified types of insurance
in relation to operations permitted by their titles.
Item 100 -
Subsection 98(1) (definition of operator)
This item extends to
infrastructure licensees the requirement that already applies to other
title-holders whereby they must maintain all structures, equipment and other
property in good condition and repair and remove unused structures, equipment
and property. This is achieved by including infrastructure licensees within the
definition of an “operator” that appears in the
section.
Item 101 - Subsection 98(1) (after paragraph (a) of the
definition of the operations area)
This item provides
that the area in which the infrastructure licensee has the maintenance and other
obligations imposed by section 98 is the infrastructure licence area as defined
by item 5.
Item 102 - Section 98 (penalty)
Section 4AB of
the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure by title-holders
to maintain structures, equipment and other property in good condition and
repair or remove unused structures, equipment and property.
Item 103 -
Section 100
This item repeals section 100, which provides, among
other things, that a permittee, lessee or licensee shall not make a well any
part of which is less than 300 metres from a boundary of the permit area, lease
area or licence area, as the case may be, except with the consent in writing of
the Designated Authority and in accordance with such conditions, if any, as are
specified in the instrument of consent. Also repealed is the provision that,
where a permittee, lessee or licensee does not comply with the above
prohibition, the Designated Authority may, by instrument in writing served on
the permittee, lessee or licensee, direct him to plug or close off the well, or
comply with other specified directions within the period specified in the
instrument.
These provisions are repealed because they are technical and
more appropriately covered by directions issued by the Designated Authority
under section 101 of the Act.
Item 104 - Subsection
101(1)
This item extends to infrastructure licensees the provision
that already applies to other title-holders whereby the Designated Authority may
serve on the title-holder written directions as to any matter with respect to
which regulations may be made.
Item 105 - Subsections 101(2A), (2B)
and (2C) (penalty)
Section 4AB of the Crimes Act 1914
provides a formula for the conversion of pecuniary penalties in Commonwealth
Acts to penalty units. This item expresses in penalty units the pecuniary
penalty that currently applies to failure by a title-holder to distribute or
display to agents, staff or other relevant parties copies of directions received
by that title-holder under section 101.
Item 106 - Paragraph
102(2A)(a)
This item refers to costs and expenses incurred by the
Designated Authority in carrying out actions where the person to whom a
direction has been given or to whom the direction is applicable fails to comply
with the direction. Such costs and expenses are a debt payable to the
Commonwealth by the person to whom the direction was given or to whom the
direction is applicable. Currently, subsection 102(2A) provides a defence that
may be used by a person who is not the title-holder but to whom the direction is
applicable, specifically that the person did not know or could not reasonably be
expected to know of the direction. This item extends this defence to persons
affected by directions given to infrastructure licensees.
Item 107 -
Paragraph 103(1)(a)
Paragraph 103(1)(a) refers to renewals of various
titles including pipeline licences. This item deletes from the paragraph the
mention of pipeline licences because this is rendered superfluous by the
amendment in item 67 making the term of a pipeline licence
indefinite.
Items 108, 109, 110, 111, 112 and 113 - Paragraph
103(1)(j), Paragraph 103(1)(j), Paragraph 103(1)(k), Subsection 103(1),
Paragraph 103(1)(n) and Subsection 103(1)
Subsection 103(1) provides
that the Joint Authority may vary, suspend or exempt a title-holder from
compliance with any or all the conditions to which the title is subject. These
items together extend this power to the Joint Authority in respect of
infrastructure licences, specifically where such variation, suspension or
exemption has been sought by the infrastructure licensee or where the Designated
Authority or Joint Authority gives a direction or consent to the infrastructure
licensee.
Item 114 - Paragraph 103(2)(b)
Paragraph
103(2)(b) provides that the Joint Authority’s powers under
subsection 103(1) to vary, suspend or exempt a title-holder from compliance with
title conditions do not authorize the Joint Authority to take action to the
extent that it would affect the term of the title. This item extends this
provision to infrastructure licences.
Items 115 and 116 - Subsection
104(1) and After paragraph 104(1)(a)
These items insert a provision
enabling the holder of an infrastructure licence to apply for consent to
surrender the infrastructure licence. The surrender application is to apply to
the infrastructure licence area as a whole.
Item 117 - Subsection
104(3)
This item extends to infrastructure licensees the provision
that already applies to other title-holders whereby the Designated Authority
may, in exceptional circumstances, consent to the surrender of the title even
where there has not been compliance with the requirements set out in subsection
104(2). These requirements relate to the payment of fees, meeting the conditions
of the title, removal of property, protecting the natural resources of the area
and making good any damage to the seabed.
Item 118 - After paragraph
104(5)(a)
This item inserts a paragraph clarifying that, in the case
of infrastructure licences, the abovementioned requirements of subsection 104(2)
relate to the infrastructure licence area.
Items 119, 120, 121 and 122
- Section 105, Paragraph 105(1)(a), After paragraph 105(1)(e) and Subsection
105(2)
These items extend to infrastructure licences the cancellation
provisions that already apply to other titles in cases where there is
non-compliance with title conditions, directions, regulations, other
requirements of the Act or payment obligations.
Item 123 - Section
106
This item repeals section 106 in its current form and substitutes
an amended version which extends to infrastructure licences the provisions that
already apply under the section to other titles. Specifically, conviction for an
offence under the Act will not preclude cancellation of an infrastructure
licence on the same grounds. Conversely, the cancellation of an infrastructure
licence will not preclude a conviction for an offence on the same grounds.
Likewise, a judgement or a part or full payment after 3 months will not preclude
cancellation of the infrastructure licence on the grounds that payment of
amounts payable was not made within 3 months. Conversely, the cancellation
of an infrastructure licence on grounds of non-payment will have no effect on
liability to pay the arrears and any penalty payments.
Items 124, 125
and 126 - Subsection 107(1), Subsection 107(2) and Paragraph
107(3)(b)
These items refer to titles that are no longer in force or
are in force only in part, and extend to infrastructure licences the Designated
Authority’s powers in respect of other such titles to issue directions for
the removal of property brought into the title area. This is to provide for the
conservation and protection of the natural resources and making good any damage
to the sea-bed.
Item 127 - Section 107 (penalty)
Section
4AB of the Crimes Act 1914 provides a formula for the conversion of
pecuniary penalties in Commonwealth Acts to penalty units. This item expresses
in penalty units the pecuniary penalty that currently applies to non-compliance
with a direction given by the Designated Authority for the removal of property
brought into the title area.
Items 128 and 129 - Section 108 and
Paragraph 108(b)
These items extend to infrastructure licences the
provision that already applies in relation to other titles no longer in force or
in force only in part, where a direction given to the title-holder under section
107 was not complied with. Specifically, the Designated Authority may then do
any or all of the things that were required by the direction and may, by Gazette
notice, direct the removal of any property from the area to which the title
applied. The same notice is to be served on all persons believed to be owners of
the property in question.
Item 130 - Sections 109 and 110
This item repeals sections 109 and 110 which provide an instalment
payment facility for cash bids for a permit or a licence in respect of
surrendered blocks. Repeal of this provision is deemed appropriate in view of
lack of interest in making use of the facility.
Item 131 - Paragraph
111(2)(a)
This item repeals the requirement that applications for
special prospecting authorities need to be submitted in accordance with an
approved form. Under current administrative procedures, this is considered
unnecessary.
Item 132 - Subsection 111(9) (penalty)
Section 4AB of the Crimes Act 1914 provides a formula for the
conversion of pecuniary penalties in Commonwealth Acts to penalty units. This
item expresses in penalty units the pecuniary penalty that currently applies to
failure by a former holder of a special prospecting authority to comply with a
direction given by the Designated Authority under section 111.
Item
133 - Paragraph 112(2)(a)
This item repeals the requirement that
applications for access authorities need to be submitted in accordance with an
approved form. Under current administrative procedures, this is considered
unnecessary.
Item 134 - Subsection 112(10)
(penalty)
Section 4AB of the Crimes Act 1914 provides a
formula for the conversion of pecuniary penalties in Commonwealth Acts to
penalty units. This item expresses in penalty units the pecuniary penalty that
currently applies to failure by a former holder of an access authority to comply
with a direction given by the Designated Authority under section
112.
Item 135 - Subsection 112(11) (penalty)
Section 4AB of
the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure by a holder of an
access authority to provide regular reports to a person holding another title
over the block or blocks to which the access authority applies.
Item
136 - Paragraph 113(3)(b)
This item refers to costs incurred by the
Commonwealth in doing anything that was not done by a title-holder to whom a
direction by the Designated Authority applied. This item extends to
infrastructure licensees the provision that already applies to other
title-holders whereby such costs are recoverable by the Commonwealth from the
title-holder in a court of competent jurisdiction.
Item 137 -
Subsection 115(1)
Subsection 115(1) gives the Designated Authority or
an inspector power to require a person to provide information or documents held
by that person relating to petroleum exploration, production or pipeline
construction and operation. This item extends this power to require information
pertaining to facilities constructed under an infrastructure licence,
specifically information on processing or storage of petroleum or preparation of
petroleum for transport.
Items 138 and 139 - Subsection 115(2) and At
the end of section 115
Subsection 115(2) provides that a person is
not excused from providing information, answering a question or producing a
document on the grounds that that action could incriminate him or her, but the
information furnished or the answer to the question is not admissible in
evidence against the person except in proceedings on a charge of giving false or
misleading information in the answer.
This item clarifies the provision,
making it consistent with the wording of the amended clause 32 of Schedule 7
(item 169).
Item 140 - Section 117 (penalty)
Section 4AB
of the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure by a person to
give information as required under section 115, including knowingly giving false
or misleading information .
Item 141 - Section 118
This
item repeals section 118 because all provisions contained in it are included in
the new Part IIIA inserted by item 161.
Item 142 - Saving
This item saves the provisions of section 118 in their application
to information given to the Designated Authority before the commencement of Part
IIIA. The reason for this is that the new Part IIIA, unlike section 118, is
based on the submitter of information classifying the information at the time
of submission as to whether it should be protected from release for an
extended period or indefinitely. The changes brought about by Part IIIA are
therefore prospective and cannot apply to information already
submitted.
This item additionally saves Petroleum (Submerged Lands)
Regulation No. 9 providing for the calculation of fees with reference to various
subsections of section 118. These fees are set to cover costs associated with
lending a document, core, cutting or sample to a person, time taken to locate
information, documents, cores, cuttings or samples, copying or reproduction of
documents and consignment of documents, cores, cuttings or samples. The
application of these fees is also carried through to the relevant subsections of
Part IIIA. In either application, the regulations may be amended.
Item 143 - Subsection 119(3)
This item reimposes the current
imprisonment penalty applicable to the owner and person in charge of a vessel
entering or remaining in a safety zone in contravention of the Act, but deletes
the pecuniary penalty in view of the fact that pecuniary penalty is now
automatically linked to the term of imprisonment in accordance with the formula
set out in section 4B of the Crimes Act 1914.
Item 144 -
Subsection 120 (penalty)
Section 4AB of the Crimes Act 1914
provides a formula for the conversion of pecuniary penalties in Commonwealth
Acts to penalty units. This item expresses in penalty units the pecuniary
penalty that currently applies to failure by a person to report to the
Designated Authority the discovery of water in a permit, lease or licence area
as required by section 120.
Item 145 - Section 121
This
item repeals section 121 which provides for the Designated Authority to direct a
title-holder to carry out a survey of a well, structure or specified equipment
and to report on the survey. This provision is repealed because it is deemed
more appropriate for the Designated Authority to order surveys by means of
directions issued under section 101 of the Act.
Item 146 - Subsection
122(1)
This item extends to infrastructure licensees the power
already held by the Designated Authority to direct persons operating under other
titles to maintain records, samples and the like in connection with those
operations and to furnish them to the Designated Authority.
Item
147 - Subsection 122(2) (penalty)
Section 4AB of the Crimes Act
1914 provides a formula for the conversion of pecuniary penalties in
Commonwealth Acts to penalty units. This item expresses in penalty units the
pecuniary penalty that currently applies to non-compliance with a direction
given under section 122.
Item 148 - Section 124
This item
extends to infrastructure licences the interference minimisation requirement
that already applies to persons operating under other titles, specifically as
regards interference with navigation, fishing, conservation of the natural
resources of the sea and seabed, or other lawful activities of other parties.
Item 149 - Section 124 (penalty)
Section 4AB of the
Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to an act of interference in
contravention of section 124.
Item 150 - After section 124
This item inserts a new section 124A prohibiting, in offshore areas
covered by the Act, intentional or reckless interference with or damage to any
structure or vessel used for any purpose approved under the Act as well as
operations or works connected with that structure or vessel. The 10 year
imprisonment penalty will be equal to the most severe penalty in the Act, the
other offence attracting this penalty being applicable to the owner and person
in charge of a vessel entering or remaining in a safety zone in contravention of
the Act.
Item 151 - Subsection 125(1)
This item gives to
the Designated Authority in respect of an adjacent area the power currently held
by the Joint Authority to appoint inspectors.
Item 152 - Saving
This item provides that the status of an inspector who has been
appointed by the Joint Authority is unaffected by the amendment to subsection
125(1).
Item 153 - Subsection 125(3) (penalty)
Section 4AB
of the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure by an inspector to
surrender a certificate on the expiry or revocation of his or her
appointment.
Item 154 - Paragraph 126(1)
This item adds to
the powers of an inspector the power to have access to facilities covered by an
infrastructure licence.
Item 155 - Section 126
(penalty)
Section 4AB of the Crimes Act 1914 provides a
formula for the conversion of pecuniary penalties in Commonwealth Acts to
penalty units. This item expresses in penalty units the pecuniary penalty that
currently applies to obstructing or hindering an inspector in the exercise of
his or her powers.
Item 156 - Section 131
This item
repeals section 131 dealing with continuing offences because the issue is now
covered by section 4K of the Crimes Act 1914.
Item 157 -
Paragraphs 133(1)(a) and (b)
Various offences in the Act are
referred to in paragraph 133(1)(a) as offences which can lead to orders for
forfeiture of aircraft, vessels or equipment used in committing the offence or
of petroleum recovered or conveyed as part of the offence. This item adds to
paragraph 133(1)(a) mention of section 59A, which specifies penalty for offences
relating to infrastructure facilities, meaning infrastructure plant, equipment
and processed products can likewise be forfeited. In addition, the Crimes Act
1914 contains sections providing penalties for aiding and abetting in the
commission of an offence, being an accessory after the fact, attempting to
commit an offence, inciting or urging the commission of an offence and
conspiracy to commit an offence. These sections are also listed in paragraph
133(1)(b) as offences that can similarly lead to forfeiture. However, the
mention here of section 5 of the Crimes Act, referring to aiding and
abetting, has been inadvertent because no offence arises under section 5 itself.
Aiding and abetting in the commission of an offence is made equivalent to the
commission of the offence itself, not an offence arising under section 5 of the
Crimes Act. Accordingly, this item deletes mention of section 5 of the Crimes
Act from paragraph 133(1)(b). It also corrects the reference to the
provision in section 86 of the Crimes Act, which has undergone a minor paragraph
numbering change because of an amendment to that Act.
Item 158 -
Paragraph 135(b)
Section 135 stipulates that proceedings in respect
of offences against the Act can be brought at any time, as can proceedings in
respect of offences linked to sections of the Crimes Act, as outlined under item
157. This item makes, in paragraph 135(b), the same changes to the list of
sections of the Crimes Act as are made in paragraph 133(1)(b).
Item
159 - Subsection 138A(5)
This item extends to infrastructure
licences the provisions that already apply to other titles in relation to the
service of documents where there are 2 or more registered holders of the
title.
Item 160 - Subsection 140E(2)
Section 4AB of the
Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to specified acts of
hindering persons who are authorised to board vessels.
Item 161 -
After Part III
This item inserts the new Part IIIA which replaces in
the Act all provisions of section 118, relating to the release of information,
which is repealed by item 141. Part IIIA is intended to be a rewrite of section
118 in a simplified form but it also adds some provisions that do not exist in
section 118. These are specifically indicated below.
Section 150 provides
definitions of a number of terms that are fundamental to setting in place the
provisions in Part IIIA. These terms do not exist in section 118. The provision
for information to be classified by the submitter as derivative or confidential
is a provision which does not exist in section 118. The section also omits the
procedure of gazetting proposed releases of derivative information in favour of
a system that respects the submitter’s initial classification, qualified
by the Designated Authority’s right to disagree within 30 days. The
section defines the date when cores, cuttings, well data, logs, sample
descriptions and other documents relating to the drilling of a well are taken to
have been given to the Designated Authority. It also defines the date when
geophysical or geochemical data relating to a survey are taken to have been
given to the Designated Authority. A way of clearly determining these dates is
required for purposes of calculating “the relevant day” under
section 150E
Section 150A specifies that Part IIIA applies only to
information given to the Designated Authority after the commencement of the
Part, but makes no distinction in relation to petroleum mining samples given to
the Designated Authority in the past or future. The reason for this is that Part
IIIA introduces the concept of the submitter classifying information at the
time of submission as to whether it should be protected from release for an
extended period or indefinitely. However, the length of time for which a
petroleum mining sample and particulars about it can be withheld from public
access is not contingent on the submitter’s opinion or open to dispute.
Thus Part IIIA applies to petroleum mining samples already submitted as much as
to those to be submitted after the commencement of the Part.
Section 150B
places a general prohibition on publishing or disclosing documentary information
or publishing information about, or allowing the inspection of, a petroleum
mining sample, except as specified. The specified provisions for release are as
set out elsewhere in Part IIIA or for administration of the Act or regulations
or release to a Commonwealth or State Minister. This section in effect places a
perpetual prohibition on the public release of confidential information, as
there is no provision for its public release anywhere in Part
IIIA.
Section 150C enables the Designated Authority to release
information to a Commonwealth or State Minister. This includes Ministers whose
portfolios do not include the administration of any petroleum legislation. The
section also enables the Commonwealth Minister administering the Act to require
the Designated Authority to release to the Commonwealth Minister any documentary
information or a sample.
Section 150D deals with the disclosure of
documentary information and making petroleum mining samples available for public
inspection. It does not allow the release of excluded information, ie derivative
information, confidential information or particulars about an applicant’s
qualifications, technical advice or financial resources. Under this section,
documentary information in an application is releasable immediately after the
grant, renewal or refusal of the petroleum mining instrument that was sought.
Other documentary information and samples are releasable after the
“relevant day” provided for under section 150E. Section 150D also
provides for a fee to apply to access to information or samples where such a fee
is prescribed in the Regulations.
Section 150E identifies the
“relevant day” for the release of various classes of information and
sample. With the exception of subsection 150E(7), these provisions replicate
section 118.
Subsection 150E(7) creates a new class of information. It
refers to information that is a 3 dimensional seismic survey, is collected
for sale on a non-exclusive basis, may freely be reprocessed by the buyer and is
accompanied by 2 dimensional information derived from the seismic survey that is
presented in a seismic data grid scaled in time. In respect of such
3 dimensional information, the relevant day is a maximum of 8 years after
the information was given to the Designated Authority regardless of whether a
permit, lease or licence is or was in force in respect of the block. The precise
day is to be determined by the Designated Authority.
The seismic data
grid scaled in time, as defined in subsection 150(1), will consist of vertical
cross-sections of seismic information from the 3 dimensional processed
image of geological strata in a grid with 2 kilometre spacing in 2
directions. The significance of this 2 dimensional information is that members
of the public will be able to obtain earlier access to it under the Act than to
the full 3 dimensional survey results. The relevant day for the release of
this 2 dimensional information will be as provided by one of the other
subsections of section 150E, as applicable. The 2 dimensional information will
give parties accessing it some indication of what lies beneath the seabed
without divulging to them the more valuable detailed information they would gain
by buying the full 3 dimensional survey results. To allow for the
possibility that evolving technology may make the 2 kilometre by
2 kilometre spacing of the grid less appropriate in the future, subsection
150(1) provides for the spacing to be varied by regulation.
Section 150F
refers to information or a sample that has been given to the Designated
Authority by the holder of a permit, lease, production licence, special
prospecting authority or access authority where that party has, of his or her
own volition, published the information, made the sample available for
inspection or given written consent for this to occur. In these cases, section
150F provides that the Designated Authority or Commonwealth Minister may release
the information or sample at any time after the publication has occurred or the
consent has been given, subject to the payment of a fee where prescribed in the
Regulations.
Section 150G provides for the release after 5 years of
receipt of derivative information, ie information which the submitter classifies
as a conclusion or opinion wholly or partly drawn from other documentary
information and the Designated Authority does not disagree with the
classification within 30 days of receipt.
Sections 150H and 150J are
based on the review process in section 118 but differ from it in two notable
respects. Firstly, there is review not only in respect of contested information
that is claimed by the submitter to be confidential but also in respect of
contested information that is claimed by the submitter to be derivative (ie the
Designated Authority believes it to be documentary and therefore releasable
earlier than derivative information). Secondly, unlike the procedure in section
118, the Commonwealth Minister does not become involved in determining the
status of information except as the reviewer of the Designated Authority’s
decision. This review is available if the Designated Authority has considered
and decided upon the objection and the submitter is dissatisfied with that
decision.
Section 150K (a new provision which does not exist in section
118) refers to the fact that copyright of material submitted under the Act and
releasable under Part IIIA resides with the original copyright owner who would
normally be the author or company submitting the information. This section is
intended to clarify that the Designated Authority, or the Commonwealth Minister,
is able to provide to the public copies of releasable documents under Part IIIA
without in any way changing the ownership of copyright. This section is intended
to put beyond doubt the fact that the Designated Authority, or the Commonwealth
Minister has a non-exclusive right to copy those data.
Item 162 -
Subsection 152(1) (paragraph (b) of the definition of reviewable
decision)
This item extends the application of review by the
Administrative Appeals Tribunal to actions by the Commonwealth Minister under
Part IIIA in the same way as actions by the Commonwealth Minister under section
118 are subject to Administrative Appeals Tribunal review.
Item 163 -
Paragraph 157(2)(e)
Paragraph 157(2)(e) provides that the
Governor-General may make regulations for securing, regulating, controlling, or
restricting the construction, erection, maintenance, operation or use of
installations or equipment. This item inserts the word “facilities”
to make it clear that the power extends to facilities under infrastructure
licences.
Item 164 - Paragraph 157(5)(a)
Section 4AB of
the Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to an offence against the
regulations made under the Act.
Items 165 and 166 - Subclause 4(1) of
Schedule 7 (penalty) and Clause 5 of Schedule 7 (penalty)
Section
4AB of the Crimes Act 1914 provides a formula for the conversion of
pecuniary penalties in Commonwealth Acts to penalty units. These items express
in penalty units the pecuniary penalty that currently applies to failure by an
employer to take all reasonable steps to protect the health and safety at work
of employees and of other persons at or near the workplace.
Item 167 -
Subclauses 6(1) and (2), 7(1) and 8(1) of Schedule 7
(penalty)
Section 4AB of the Crimes Act 1914 provides a
formula for the conversion of pecuniary penalties in Commonwealth Acts to
penalty units. This item expresses in penalty units the pecuniary penalty that
currently applies to failure by manufacturers to ensure the safety of plant and
substances produced by them, failure by suppliers to ensure the safety of plant
and substances supplied by them and failure by persons erecting plant to ensure
its safety to employees using it.
Item 168 - Subclause 9(1) of
Schedule 7 (penalty)
Section 4AB of the Crimes Act 1914
provides a formula for the conversion of pecuniary penalties in Commonwealth
Acts to penalty units. This item expresses in penalty units the pecuniary
penalty that currently applies to failure by an employer to take all reasonable
steps to ensure duties and directions given to employees are consistent with
enhancing occupational health and safety.
Item 169 - At the end of
clause 32 of Schedule 7
Clause 32 gives an investigator power to
require any employer, any person representing an employer, any owner or occupier
of a workplace at which the investigation is being conducted or
any employee
or contractor to answer any questions put by the investigator, and to produce
any documents requested by the investigator if they are reasonably connected
with the conduct of the investigation. The clause also provides that a person
must not, without reasonable excuse, fail to comply with a requirement under
this clause. This leaves the way open for the person to refuse to answer a
question or produce a document on the ground that the information so furnished,
the answer to the question or the production of the document might tend to
incriminate him or her.
Such a right is not available under section 115,
which sets out the power to require information vested on inspectors under the
Act. Under that section a person is not excused from furnishing information,
answering a question or producing a document when required to do so on the
ground that the information furnished, the answer to the question or the
production of the document might tend to incriminate the person or make him or
her liable to a penalty. However, the information furnished or the answer to the
question is not admissible in evidence against the person except in proceedings
on a charge of giving false or misleading information in the answer.
This
item removes the anomaly between section 115 and clause 32 by inserting in
clause 32 the same provision as exists in section 115.
Item 170 -
Subclauses 34(5) and 35(4) of Schedule 7 (penalty)
Section 4AB of the
Crimes Act 1914 provides a formula for the conversion of pecuniary
penalties in Commonwealth Acts to penalty units. This item expresses in penalty
units the pecuniary penalty that currently applies to failure by an employer to
ensure compliance with a direction by an investigator that the workplace not be
disturbed or failure by an employer to ensure compliance with a prohibition
notice.
Item 171 - Subclause 36(6) of Schedule 7 (penalty)
Section 4AB of the Crimes Act 1914 provides a formula for the
conversion of pecuniary penalties in Commonwealth Acts to penalty units. This
item expresses in penalty units the pecuniary penalty that currently applies to
failure by a responsible person to ensure compliance with an improvement notice
issued by an investigator.
Item 172 - Clause 46 of
Schedule 7 (penalty)
Section 4AB of the Crimes Act 1914
provides a formula for the conversion of pecuniary penalties in Commonwealth
Acts to penalty units. This item expresses in penalty units the pecuniary
penalty that currently applies to employers levying a charge on employees in
respect of anything done or provided, in accordance with the Act or the
regulations, to ensure the health, safety or welfare of employees at
work.
Part 3 – AMENDMENT OF THE PETROLEUM (SUBMERGED LANDS) FEES ACT
1994
SCHEDULE 2
Item 1 – After paragraph 4(1)(c)
Section 4 of this Act provides that the holder of an exploration
permit, a retention lease, a production licence or a pipeline licence must pay a
fee in respect of each year of the term
of the permit, lease or licence. This
item adds an infrastructure licence to the titles to which the obligation to pay
a fee applies.