Petroleum Act 2000 Summary

The legislation governing onshore petroleum exploration and production in South Australia was reviewed through an extensive process of industry and public stakeholder consultation commencing in 1996 which led to the proclamation of the Petroleum Act 2000 and the promulgation of the Petroleum Regulations 2000 on the 25 September 2000.

The main drivers behind the need for this new Act were the:

  • changing attitudes and expectations of the community at large, in particular to environmental issues - these changing expectations called for legislation which can address environmental and heritage issues more openly and transparently than the previous Act
  • competition policy reform facing the industry required exposing the industry to greater competition, eg smaller blocks, shorter licence terms and access to prospective areas to more licensees
  • need for regulations to be more receptive to changing and improving technology by focussing on the achievement of objectives rather than prescribing what needs to be done.

To address these issues the Petroleum Act 2000 was developed through embracing six key principles of certainty, openness, transparency, flexibility, practicality and efficiency.

Certainty
The rights conferred by licences are certain and will not be subject to unreasonable change or challenge. Also the regulatory objectives and obligations under the regulatory regime are uniform, clear and predictable to all licensees.

Openness 
Decision-making processes are not exclusive and the legal rights of all stakeholders are not unfairly compromised. This entails the need for fair and equitable processes for the:

  • allocation of title rights;
  • managing of rights of other land owners with overlapping land rights;
  • managing of rights of title holders to access land for the exploration and development of regulated resources;
  • provision of access to natural resources governed by this legislation where surface access within the licence area may be restricted by the sensitivity of the natural environment or other previously established rights;
  • stakeholder consultation on the establishment of the environmental protection objectives; and
  • appeal rights to those affected by decisions made under the legislation.

Transparency
The objects and intent of the regulatory regime are clearly communicated and understood by all stakeholders. Also, stakeholders are provided with the opportunity to input into the development of these objects and intent.

The decision-making processes are visible and comprehensible to all stakeholders and that industry performance in terms of compliance with the regulatory objectives is apparent to all stakeholders.

Flexibility
There is sufficient flexibility in the types of licences that can be granted so as to more adequately reflect the purpose of the activities to be undertaken and the stage of development of the resource under the licence.

The level of intervention (including enforcement) needed to ensure compliance is determined on the basis of the individual company being regulated and the outcomes needed to be achieved.

Practicality
The regulatory objectives are achievable and measurable.

Efficiency
The compliance costs imposed on both government and the company by the regulatory requirements are minimised and justified. Distributional effects across society of company negative externalities is minimised and companies remain liable for the costs of such externalities. An appropriate rent is paid to the community of South Australia from the value realised from the exploitation of its natural resources.

The new Act also extends the resources administered by this legislation through the inclusion of geothermal energy, coal seam methane and underground gas storage.


The main features of the Petroleum Act 2000

In applying the above principles the Act achieves:

  • A more effective means for allocating and managing the rights to explore for and develop petroleum and other natural resources so as to facilitate competition.
  • Greater security of title of petroleum rights through improved registration procedures and greater flexibility in the types of licences that can be granted.
  • A regulatory regime designed to more effectively and efficiently set and achieve environment and public safety protection objectives.
  • Effective public consultation processes for the establishment of environmental objectives.
  • A more effective means for ensuring that security of production and supply of natural gas is maintained at a prudent level.
  • Effective public reporting to provide all stakeholders with sufficient information on industry performance and government decision-making.
  • A flexible regulatory approach which allows the selection of the most appropriate level of regulatory intervention and enforcement in order to ensure compliance with the regulatory objectives.

The Petroleum Act 2000 is currently under review. Information about the proposed amendments and a Green Paper inviting comments and submissions on the proposals is available. The deadline for submissions is 29 June 2007.