The Australian parliament has passed legislation for stronger government oversight for the offshore oil and gas industry.
Yesterday, the Minister for Resources and Water Keith Pitt announced parliament had passed legislation to strengthen Australia’s offshore oil and gas regulatory framework.
The changes will mean stronger government oversight of a range of company transactions intended to ensure that entities operating in the oil and gas industry have the financial resources and technical capability to operate and decommission safely.
The changes also expand the government’s ability to call on previous titleholders to pay for decommissioning and environmental remediation in an event where the new titleholder is unable to meet their financial obligations.
Minister Pitt said the laws ensure taxpayers are not left to pick up the cost of future decommissioning work on offshore oil and gas projects.
“The trailing liability provisions will be an action of last resort when all other safeguards have been exhausted and will reduce the risk that the financial costs of decommissioning will be left to Australian taxpayers,” he said.
“It also sets the expectation that sellers will undertake appropriate due diligence before selling assets, titles and infrastructure, so they can avoid being called back to decommission and remediate title areas.”
The measures were developed in consultation with industry and following recommendations from the Walker Review (an independent review into the circumstances leading to the liquidation of Northern Oil and Gas Australia).
“The measures strike the right balance between investment in the offshore oil and gas industry and managing a maturing industry, demonstrating this government’s ongoing commitment to a best practice, globally recognised oil and gas sector,” said Minister Pitt.
For more information visit the Minister for Resources and Water’s website.