PERTH (miningweekly.com) – The Australian Petroleum Production and Exploration Association (Appea) on Friday warned that the New South Wales state government’s latest decision to maintain the suspension over drilling activities at Rosella, set an alarming precedent for resource development in the state.

ASX-listed Metgasco was on Thursday informed that the New South Wales Office of Coal Seam Gas (OCSG) would maintain its suspension of the approval to drill at the Rosella property.

The OCSG last month suspended Metgasco’s approval to drill at the Rosella well, prompting the ASX company to launch an appeal for a judicial review in the Supreme Court, in the hopes that the judicial review proceedings would set aside the OCSG’s decision, claiming it was unlawful.

Metgasco agreed to defer this legal action to allow the OCSG time to complete its reconsideration of the suspension.

MD Peter Henderson said on Thursday that the company was disappointed with the outcome of the government review, and said that the company would continue its legal action if it considered that the errors in the original decision were not addressed in the latest review.

He added that the government should be defending exploration and investment in the natural gas industry, particularly at a time when there was a shortage in natural gas supplies.

“The government should not allow itself to be intimidated by activists making spurious and ill-informed claims about drilling for natural gas when the state is running out of gas and regional areas are crying out for investment,” Henderson said.

Appea on Friday lamented the state government’s decision, saying it suggested that protest action was now considered by government and regulators to be a proxy for “ineffective” consultation, and therefore, grounds for licence suspension.

The industry body warned that the Metgasco suspension could raise concerns for any resource project in New South Wales and reduce certainty for shareholders and employees.