CONCESSIONAL AND CORPORATE AVENUES FOR OIL EXPLORATION IN AUSTRALIA AND THE LEGISLATIVE CONSTRAINT

Abstract

When an explorer decides he wishes to participate in exploration in Australia there are three elements which will affect his fortune over and above technical considerations. These are (a) the concessional avenue open to him, (b) the corporate avenue open to him, and (c) the legislative constraints.

The traditional concessional avenue in the off-shore environment has been by gaining rights under the Submerged Lands Acts. This legislation has been enacted by both the Commonwealth and State Governments in mirror-image fashion for the Adjacent Area lying offshore from each State. In the onshore environment the different States have their own discrete legislative regimes by which they govern exploration and development rights.

As a general concept title to petroleum is vested in the Crown.

The corporate avenues by which the explorer enters into a relationship, either directly with Government or with some other company which has a relationship directly with Government, are as follows:

An explorer individually may be a concession holder;

a company may be a concession holder;

a joint-stock company may be a concession holder;

a partnership may be a concession holder;

a joint-venture may be a concession holder;

a company may enter into a farm-in/farm-out or "Exploration and Participation Agreement" with a concession holder;

a company may hold an over-riding royalty secured by a concession holder;

a company may have a carried interest secured by a concession holder;

there may be a take-over of company shares.

The traditional concessional and corporate avenues are affected by certain statutory enactments of the Commonwealth of Australia. This legislation comprises the Petroleum and Minerals Authority Act, the Foreign Take-overs Act, the Seas and Submerged Lands Act, the Restrictive Trade Practices Act, and the legislation relating to Customs and Reserve Bank regulation. The relationship of these Acts to the Australian Constitution is examined.