QUEENSLAND PETROLEUM ACT — RUSTING ANACHRONISM OR WELL-OILED DISCRETION?

Abstract

Petroleum legislation in Queensland has been in place for some 70 years. Today's explorer finds that many of his rights derive from concepts and practices formulated well before the advent of the complicated farmout and joint venture arrangements that increasingly form the framework of exploration activities.

The primary tenement for exploration is the Authority to Prospect. However, the legislation is largely silent with respect to Authorities to Prospect, leaving the great bulk of issues arising out of that form of tenement to be determined by the Minster in his absolute and unfettered discretion; while the need for workable administrative practices will entail some uniformity, certainty as to the rights arising out of any Authority to Prospect can only be gained by reverting to the actual authority document.

The explorer expects that his exploration rights (i) will not be unduly hampered by competing rights of land owners; (ii) will be capable of being dealt with and assigned in accordance with current industry practices; and (iii) will in the event of success lead to the grant to him of a production title. Those expectations are not entirely satisfied, and the paper recommends certain reforms, including:

an express legislative statement that the holder of an Authority to Prospect has exclusive rights to explore in respect of the area the subject of his authority;that the holder of an Authority to Prospect satisfy the obligation to make compensation prior to entry by the lodging of a security bond;that compensation be determined at first instance in the Land Court;that the statutory right to the grant of a Petroleum Lease to the holder of an Authority to Prospect be restored.