Commonwealth Numbered Regulations - Explanatory Statements

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PETROLEUM (SUBMERGED LANDS) AMENDMENT REGULATIONS 2000 (NO. 1) 2000 NO. 248

STATUTORY RULES 2000 No. 248

Issued by the Authority of the Minister for Industry, Science and Resources

Petroleum (Submerged Lands) Act 1967

Petroleum (Submerged Lands) Amendment Regulations 2000 (No. 1)

Section 157 of the Petroleum (Submerged Lands) Act 1967 (the Act) states that the GovernorGeneral may make regulations, not inconsistent with the Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. The section specifies, at paragraph 157(2)(a), that these matters include securing, regulating, controlling or restricting exploration for petroleum and the carrying on of operations, and the execution of works, for that purpose.

Sections 38BB and 59B allow application fees to be prescribed in respect of retention leases sought by production licensees and in respect of infrastructure licences.

The purpose of the-Regulations was to add to and amend the Petroleum (Submerged Lands) Regulations ("principal Regulations") so that certain requirements that previously appeared in the Act became part of the Regulations. In addition, two editorial corrections to the principal Regulations were made, as well as the imposition of $1,200 application fees for two types of titles that may be granted under the Act.

The need for most of the proposed amendments arose from recent amendments to the Act.

The Petroleum (Submerged Lands) Legislation Amendment Act (No. 1) 2000 (Amendment Act) repealed, in whole or in part, sections 34, 35, 38J, 38K and 121 of the Act which deal with providing information about petroleum discoveries and carrying out surveys of wells, structures and equipment. This was done because these provisions were technical in nature and more appropriately belong in the Regulations. Some other sections were also repealed for the same reason, but they are covered in the draft Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Amendment Regulations 2000.

The repeal is effective from 7 September 2000, which is 6 months after Royal Assent. The delay in date of effect was approved to allow these Regulations to be made before the date of repeal.

The Amendment Act also created the new title of infrastructure licences. Infrastructure licences allow a company to construct and operate facilities for various processing or control activities in or near an oil-field where the operator does not have a production licence over the area in which the facilities are located. The Amendment Act provided that an application fee may be prescribed in regulations to be paid by any company that seeks an infrastructure licence. Accordingly, a $1,200 application fee was prescribed for infrastructure licences.

In addition, the Amendment Act made the term of pipeline licences indefinite and so brought an end to the system whereby holders of pipeline licences had to apply for the renewal of the licence every 21 years. Because of this change, the fee that was shown in the principal Regulations for making such applications became redundant and was deleted.

An amendment to the Act in 1998 made it possible, in certain circumstances, for the holder of a production licence to seek and obtain a retention lease. This is a holding right available in situations where production from a petroleum discovery is, for the time being, uneconomic. Previously, retention leases were available only to holders of petroleum exploration permits. A $1,200 application fee was prescribed for retention leases sought by production licensees.

The plan to make the deleted parts of sections 34, 35, 38J, 38K and 121 of the Act into Regulations was cleared by the States, Northern Territory and the petroleum industry in the lead-up to introducing the Bill which later became the Amendment Act. More recently, the States, Northern Territory and industry bodies were given the opportunity to comment on the draft Regulations and they endorsed them. This included the $1,200 application fees, which, like other application fees under the Act, are intended to cover the administrative costs incurred by the States and Northern Territory in processing the applications.

Accordingly, these Regulations:

*       added regulations to cover the provisions of sections 34, 35, 38J, 38K and 121 of the Act that were repealed (see Schedule 1, item 2 of the Attachment);

*       prescribed a $1,200 application fee for retention leases sought by production licensees (see Schedule 1, item 5 of the Attachment);

*       prescribed a $1,200 application fee for infrastructure licences (see Schedule 1, item 6 of the Attachment);

*       deleted the fee that was shown in the principal Regulations for making pipeline licence renewal applications (see Schedule 1, item 7 of the Attachment); and

*       made minor incidental corrections to the principal Regulations (see Schedule 1, items 3 and 4 of the Attachment).

Details of the Regulations are set out in the Attachment.

The Regulations commenced on the day when the repeal of the abovementioned provisions came into effect, ie on 7 September 2000.

ATTACHMENT

Regulation 1- Name of Regulations

This Regulation provided the title of the Regulations.

Regulation 2 - Commencement

This Regulation provided for the commencement of the Regulations on the day when item 34 of Schedule 1 to the Petroleum (Submerged Lands) Legislation Amendment Act (No. 1) 2000 came into effect. This was one of the items that repealed a provision in the Act for the purpose of making it into a regulation. The day when this occurred was 7 September 2000.

Regulation 3 - Amendment of Petroleum (Submerged Lands) Regulations

This Regulation provided that the amendments to the Petroleum (Submerged Lands) Regulations are as set out in Schedule 1.

SCHEDULE 1 AMENDMENTS

Item 1 - Regulation 1

This item brought the citation of the principal Regulations into line with current practice.

Item 2 - After regulation 2

This item contained the provisions that were repealed from the Act because they were technical in nature and more appropriately belong in the Regulations.

The new Regulations 2A and 213 include everything that was in subsections 34(2), 34(3), 38J(2) and 38J(3), and sections 35 and 38K of the Act dealing with requirements for providing information about petroleum discoveries. The new Regulation 2C includes the provisions of section 121, which allowed the Designated Authority to direct a title-holder to carry out a survey of a well, structure or specified equipment and to report on the survey. The Designated Authority is the relevant State or Northern Territory Minister responsible for petroleum, who has many functions under the Act because the Commonwealth, States and Northern Territory share administration of offshore petroleum resources.

Minor changes were made in converting these provisions to regulations. One of these changes was that the period specified for a response to a notice, by the Designated Authority must be "reasonable" or a minimum of 14 days. Another was that what the Designated Authority requires to be done must be "reasonably necessary". A third change was that any information given by a person or company in complying with item 2A cannot generally be used as evidence in a court case against that person or company. In other respects, the content of the regulations is essentially the same as what appeared in the Act.

Item 3 - Regulation 3

This item made an editorial correction to the previous wording of Regulation 3, which read: "For the purposes of paragraph 78 (3) (a) of the Act, an instrument of transfer shall be in the form specified in the Schedule." There are in fact two Schedules to the Regulations and the one referred to in this Regulation is Schedule 1. This item clarified that fact.

Item 4 - Schedule 2, heading

This item made an editorial correction to the heading of Schedule 2. Previously, the heading read: "SCHEDULE 2: PRESCRIBED FEES : Regulation 4". The Regulation referred to should have been Regulation 5.

Item 5 - Schedule 2, after item 5

This item prescribed a $1,200 application fee for retention leases sought by holders of production licences. This is equal to the fee that exists for retention lease applications made by holders of exploration permits.

Item 6 - Schedule 2, after item 10

This item prescribed a $1,200 application fee for infrastructure licences.

Item 7 - Schedule 2, item 12

This item deleted the $1,200 pipeline renewal application fee from the principal Regulations.