The Australian Government has approved new measures it says will strengthen the country’s offshore oil and gas decommissioning framework.
The measures were developed in part as a consultation on the Offshore Oil and Gas Decommissioning Review in December 2020 and January 2021 and include the strengthening of existing trailing provisions to enable government to call back a former titleholder in a broader range of circumstances, as well as an increased oversight of changes in company control.
There will also be increased requirements for financial assurance, improved transparency and public engagement, a modernising of field development plans and decommissioning planning, and earlier and proactive use of remedial directions powers if required.
The National Offshore Petroleum Titles Administrator (NOPTA) will also be given more power to require the necessary information pertaining to the new measures.
Federal Minister for Resources, Water and Northern Australia Keith Pitt said it was important to “strike a balance” between implementing the necessary regulatory safeguards while continuing to encourage investment in the industry.
“Australia’s offshore oil and gas industry has supported Australia’s energy security and economic activity for over 50 years and it will continue to be an important economic and energy security driver for the foreseeable future,” he said.
“The enhanced framework will make certain that there is effective regulatory oversight and robust financial and accountability safety nets for offshore oil and gas decommissioning requirements.
“It will strengthen protections for the environment, the industry, the Australian Government and taxpayers.”
The Australian Petroleum Production and Exploration Association (APPEA) called the measures a “step in the right direction” but said it was not completely onboard with everything the government had put forward.
“We need to get the decommissioning framework right for the industry and the thousands of jobs it supports as well as protect the environment and will be studying closely the detail of the draft bill,” said APPEA Chief Executive Andrew McConville.
“We have some concerns about a few elements, such as the operation of trailing liability, which will have adverse investment impacts, but we’ll work through that with the government,” he said.
“We remain committed to working with the government towards a sustainable solution to this complex issue.
“We consider that a whole of government approach to decommissioning regulatory reform is crucial to its success.”
Click here for more information on the offshore oil and gas decommissioning framework.