RECENT CHANGES TO AUSTRALIA'S OFFSHORE PETROLEUM REGIME

Abstract

Australia's offshore petroleum legislation is the product of a constitutional compromise enshrined in the Offshore Constitutional Settlement of 1979 between the Commonwealth and the States. Whilst it is current Federal Australian Labor Party policy to dismantle the Offshore Constitutional Settlement and re-assert exclusive Commonwealth jurisdiction from the low-water mark seawards, the Hawke Labor Government has been reluctant to implement this particular policy.

A practical consequence of the Offshore Constitutional Settlement for the industry is that many offshore titles are now being split into two separate titles — one under State legislation within the three-mile territorial sea and the other under Commonwealth legislation for the Adjacent Area beyond the territorial sea. The Commonwealth proposal to introduce cash bonus bidding for highly prospective offshore exploration permits after being defeated in the Senate in the first half of 1985 was subsequently passed in November 1985.

An APEA proposal for the introduction of a new form of title under the Petroleum (Submerged Lands) Act (PSLA) to protect currently non-commercial reserves has been adopted by legislation.

Following the cash bidding debate the Commonwealth Minister has proposed a new set of guidelines for the award of offshore permits which will contain both a fixed dry-hole commitment plus a discretionary program in the event of technical encouragement.

The paper concludes with some recommendations for establishing a more secure and certain system of title under the PSLA and to minimize the current administrative delays being experienced by industry. Finally it urges that the current level of consultation between Government and industry on matters of interest arising under the PSLA should be allowed to continue.