Woodside said on Friday it is working with other oil majors on a plan to replace the government levy on offshore producers to pay for cleaning up an abandoned oil field in the Timor Sea.
New legislation was passed in parliament on Thursday that could force big oil and gas producers to pay the cost of removing their offshore rigs.
Federal Resources Minister Keith Pitt warned that taxpayers would not “foot the bill” for producers to remove their old infrastructure.
The legislation also granted the government powers to force previous asset owners to pay decommissioning costs where the current titleholder is unable.
“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,” said Minister Pitt.
Minister Pitt estimated the industry-wide clean-up bill over the next 30 years to cost around $60 billion.
His reform was prompted by the case of the Northern Endeavour, for which the federal government was forced to take responsibility back in 2019.
Global leaders including Chevron and Exxon Mobil have voiced strong opposition to paying for rehabilitating a site they have never had anything to do with.
“Woodside is working with industry partners to present to government an alternative proposal for the decommissioning of the Northern Endeavour,” a Woodside spokesperson said.
The APPEA opposed trailing liability laws during consultation on the reform back in May, with CEO Andrew McConville calling the proposed levy a “terrible precedent [that] could have serious repercussions to Australia’s economy and to jobs”.
The measures in the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill package will become law six months after receiving Royal Assent, with the trailing liability provisions applying from 1 January 2021.
For more information visit the Minister for Resources and Water’s website.