PERTH (miningweekly.com) – The Western Australian government has again expressed its opposition to the introduction of a national offshore petroleum regulator, after the federal government on Monday announced seven new offshore exploration permits.

The proposed work programmes across the seven permits will result in a guaranteed offshore petroleum exploration investment of A$682-million over the next three years.

Three permits, awarded to Finder No 4, Woodside Energy and Riverina Energy, are in the highly prospective Carnarvon basin, off the coast of Western Australia, which remains Australia’s leading offshore petroleum-producing area.

The remaining four permits, awarded to BP Exploration, are in the frontier area of the Ceduna Sub-basin within the Bight basin off the coast of South Australia.

Mines and Petroleum Minister Norman Moore said that the growing interest for exploration and development of the petroleum industry off the coast of Western Australia highlighted the need for the administration and regulation of petroleum titles to remain with the state government.

The state government has formerly requested Federal Resources and Energy Minister Martin Ferguson to reconsider his national offshore petroleum regulator model to reform offshore petroleum regulation in Australia.

“Western Australia’s proposal for the introduction of a National Compliance Auditor would achieve improved regulation and maintain all key parts of the current regulatory system,” Moore said.

“This option would not only benefit Western Australia, the largest jurisdiction for offshore petroleum activity, but strengthen the oversight role of the federal government.”

Moore noted that such a model would ensure that any delays, gaps or duplication in regulation processes were quickly identified and resolved with appropriate resources, while also maintaining the advantage of the current extensive local knowledge, workable and timely processes, and the existing skills base, without disruption.

“This option recognises the need to boost safety standards in the offshore petroleum industry and the regulatory role of government, and supports the significant reform of state and Commonwealth areas that is already taking place in Western Australia by the Department of Mines and Petroleum.”

The Minister criticised the recommendation by the Productivity Commission in its report on the regulation of upstream petroleum activities to create a national offshore regulator, saying it was heavily flawed.

“The proposed national regulator is unlikely to provide any benefit to Australia, Western Australia or the offshore petroleum sector, even in the long term, as it will not solve the complex, crossjurisdictional boundary issues or the complexity relating to environmental and native title issues,” he said.

Moore noted that the alternative model could be achieved without any disruption to, or reduction of, the service level of regulation of offshore projects in Western Australia.

He said that the current practice of mirroring Commonwealth and state petroleum legislation would continue to provide similar legislative frameworks across jurisdictions, and the current cooperative approach could continue to deliver more timely outcomes.

“The Western Australian government does not support the introduction of a national offshore petroleum regulator, and maintains that the administration and regulation of petroleum titles should remain with the state,” the Minister said.

During the election campaign in August last year, Ferguson noted that an offshore petroleum regulator could be established as early as January 2012.

Ferguson said at the time that the current designated authority arrangements for Australia’s offshore petroleum industry had led to significant duplication, slow and inconsistent decision making, and the inefficient use of scarce expertise.

He also noted that the current system was resistant to change, with the adoption of a lowest common denominator approach to regulation, approval conditions and problem solving.

"Australia already has one of the world's most effective petroleum regulatory regimes and it will be further strengthened as we progress legislation to put in place a national offshore petroleum regulator by January 2012, at the same time as we continue to implement recommendations from the Montara report,” Ferguson said on Monday.

"The safety of our workers and environment is fundamental and will remain the priority as we progress the responsible development of our natural resources – both on and offshore."

Currently, the National Offshore Petroleum Safety Authority is restricted to operational health and safety functions over the structural integrity of pipelines, wells and wells-related equipment.

 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.