Petroleum (Submerged Lands) Fees Amendment Regulations 2003 (No. 1) 2003 No. 24
EXPLANATORY STATEMENT
Statutory Rules 2003 No. 24
Issued by the Authority of the Minister for Industry, Tourism and Resources
Petroleum (Submerged Lands) Fees Act 1994
Petroleum (Submerged Lands) Fees Amendment Regulations 2003 (No. 1)
Section 7 of the Petroleum (Submerged Lands) Fees Act 1994 (the Fees Act) states that the Governor-General 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 Petroleum (Submerged Lands) Act 1967 (the Principal Act) involves a large number of decisions relating to the day-to-day administration of the Act, including the granting of exploration permits, retention leases, production, pipeline and infrastructure licences.
Section 4 of the Fees Act provides that the holders of these titles (permits, leases and licences) must pay a fee to the Designated Authority for each year of the term of the title. The fee is specified in, or calculated in accordance with, the Petroleum (Submerged Lands) Fees Regulations 1994.
The Regulations increase the level of prescribed fees to account for rises in the costs of administering petroleum titles since the last fees increase in 1990. Since that time the consumer price index has increased by around 30 per cent. The increase for these fees also incorporates a component to reflect the introduction of the goods and services tax.
In keeping with the Offshore Constitutional Settlement and section 129 of the Principal Act, the Commonwealth will continue to repay all fees (excluding the goods and services tax component) received for the day-to-day administration of the regime to State and Northern Territory Authorities to offset their costs.
Details of the Regulations are set out in the Attachment.
The Regulations commenced on 1 March 2003.
Authority: Section 7 of the Petroleum (Submerged Lands) Fees Act 1994
ATTACHMENT
Regulation 1 - Name of Regulations
This Regulation provides the title of the Regulations.
Regulation 2 - Commencement
This Regulation provides for the commencement of the Regulations on 1 March 2003.
Regulation 3 - Amendment of Petroleum (Submerged Lands) Fees Regulations 1994
This Regulation provides that the amendments to the Petroleum (Submerged Lands) Fees Regulations 1994 are as set out in Schedule 1.
SCHEDULE 1 AMENDMENTS
Item 1 - Paragraphs 4 (a) and (b)
This item increases the prescribed annual fee for an Exploration Permit from $1000 to $1,500 per permit or from $50 to $72 for each block to which the permit relates (whichever is the greater).
Item 2 - Regulation 5
This item increases the prescribed annual fee for a Retention Lease from $6,000 to $8,600 for each block to which the lease relates.
Item 3 - Regulation 6
This item increases the prescribed annual fee for a Production Licence from $18,000 to $25,800 for each block to which the licence relates.
Item 4 - Regulation 7
This item increases the prescribed annual fee for a Pipeline Licence from $80 to $115 per kilometre, or part kilometre, of the length of the pipeline.
Overview
The Petroleum (Submerged Lands) Fees Amendment Regulations 2003 (No. 1) were enacted to adjust the fees for petroleum exploration and production activities under the Petroleum (Submerged Lands) Fees Act 1994. This regulation was introduced to address the increasing costs associated with the administration of petroleum titles, which had not been updated since 1990. The policy objective of these amendments is to align the fees more closely with the current economic environment, taking into account inflation and the introduction of the goods and services tax. These amendments were issued by the authority of the Minister for Industry, Tourism and Resources, and they ensure that the Commonwealth repays all fees (excluding the GST component) to the state and territory authorities to offset their administrative costs, in accordance with the Offshore Constitutional Settlement and section 129 of the Principal Act. The regulations came into effect on 1 March 2003.
Scope and Application
The Petroleum (Submerged Lands) Fees Amendment Regulations 2003 (No. 1) apply to holders of exploration permits, retention leases, production, pipeline, and infrastructure licences within the submerged lands of Australia, as governed by the Petroleum (Submerged Lands) Act 1967. These regulations, made under the authority of Section 7 of the Petroleum (Submerged Lands) Fees Act 1994, mandate that these holders must pay an annual fee to the Designated Authority, with the fees specified in the amended Petroleum (Submerged Lands) Fees Regulations 1994. The amendments reflect an increase in fees to accommodate the rising costs of administering petroleum titles, as well as the introduction of the goods and services tax. Notably, the Commonwealth government, in accordance with the Offshore Constitutional Settlement and Section 129 of the Principal Act, will continue to repay all fees, excluding the GST component, to state and territory authorities to offset their administration costs. The Regulations came into effect on 1 March 2003.
Key Provisions
The main operative sections of the Petroleum (Submerged Lands) Fees Amendment Regulations 2003 (No. 1) pertain to the adjustment of fees for various petroleum titles under the Petroleum (Submerged Lands) Fees Act 1994 (Fees Act). Section 7 of the Fees Act authorises the Governor-General to make regulations, which the Regulations in question do by amending the Petroleum (Submerged Lands) Fees Regulations 1994. These amendments are detailed in Schedule 1 of the Regulations and include increases in the annual fees for Exploration Permits (Regulation 4), Retention Leases (Regulation 5), Production Licences (Regulation 6), and Pipeline Licences (Regulation 7). Regulation 2 stipulates that the Regulations commenced on 1 March 2003.
The Regulations impose specific obligations on holders of petroleum titles such as Exploration Permits, Retention Leases, Production Licences, and Pipeline Licences. These obligations include the payment of increased annual fees to the Designated Authority, as specified in the amended Regulations. The fees for each type of title have been adjusted to reflect the rise in administrative costs and to incorporate the goods and services tax. These obligations are necessary to ensure that the Designated Authority receives adequate compensation for the costs associated with administering petroleum titles.
The Regulations do not explicitly outline offences or penalties for breaches. However, non-compliance with the requirement to pay the increased fees could potentially lead to enforcement actions under the Petroleum (Submerged Lands) Act 1967 (Principal Act) or other relevant legislation. Failure to meet these payment obligations might result in the suspension or revocation of the relevant petroleum titles, thereby impacting the operations of the title holders. Additionally, since the Regulations state that the Commonwealth will continue to repay fees to State and Northern Territory Authorities to offset their costs, any failure to remit these fees could lead to disputes or further regulatory action.