Petroleum (Submerged Lands) Fees Amendment Regulations 2009 (No. 1)

Overview

The Petroleum (Submerged Lands) Fees Amendment Regulations 2009 (No. 1) were enacted to address the need for updated fee structures in the offshore petroleum industry, reflecting increased administrative costs and incorporating new provisions for greenhouse gas storage. These regulations, formulated under section 781 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and section 5 of the Offshore Petroleum and Greenhouse Gas Storage (Annual Fees) Act 2006, were introduced by the Australian Parliament, specifically the House of Representatives. The amendments aimed to adjust the annual fees for various petroleum titles, such as exploration permits, retention leases, and production licenses, to align with the 13.65% increase in the consumer price index since the last adjustment on 1 January 2005. Additionally, the regulations introduced new fee structures for greenhouse gas holding leases and injection licenses, setting them at the same rate as the petroleum title fees. The policy objective behind these amendments was to ensure that the fees adequately cover the administrative costs incurred by the Commonwealth, state, and Northern Territory governments in managing the offshore petroleum regime.

Scope and Application

The Petroleum (Submerged Lands) Fees Amendment Regulations 2009 (No. 1) amend the Petroleum (Submerged Lands) Fees Regulations 1994 to align annual fees with inflation, specifically the 13.65% increase in the consumer price index since the last adjustment in 2005. These amendments apply to several types of petroleum titles and licences, including petroleum work-bid exploration permits, special petroleum exploration permits, petroleum retention leases, petroleum production licences, infrastructure licences, and pipeline licences, as well as introducing fees for greenhouse gas holding leases and greenhouse gas injection licences. The Regulations are made under the authority of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Annual Fees) Act 2006. They are administered jointly by the Commonwealth, state, and Northern Territory governments, with the Commonwealth reimbursing state and Northern Territory authorities for the costs of administering the offshore petroleum regime. The amendments do not impose new regulatory burdens and have no financial impact on the Australian Government budget. The Regulations commence on 1 July 2009 and update the references within the regulations to be consistent with the Annual Fees Act.

Key Provisions

The Petroleum (Submerged Lands) Fees Amendment Regulations 2009 (No. 1) (the Regulations) primarily amend the Petroleum (Submerged Lands) Fees Regulations 1994 to increase fees for various petroleum titles and introduce fees for greenhouse gas storage titles (regs 4–10). These changes align with the 13.65% increase in the Consumer Price Index (CPI) since the last fee adjustment on 1 January 2005, as agreed upon by the Ministerial Council on Minerals and Petroleum Resources (reg 4). The Regulations also update references to the Offshore Petroleum and Greenhouse Gas Storage (Annual Fees) Act 2006 (Annual Fees Act) to reflect the recent inclusion of greenhouse gas storage provisions in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Principal Act) (reg 3(1)). The amendments introduce fees for greenhouse gas holding leases and greenhouse gas injection licences, setting them at the same level as the corresponding petroleum titles (regs 9–10). Under these Regulations, various petroleum and greenhouse gas titles now have specific annual fees that must be paid by the holders of these titles. For instance, a petroleum work-bid exploration permit holder must now pay an annual fee of $1135 or $55 for each block (reg 4(1)). Similarly, holders of petroleum retention leases, production licences, infrastructure licences, and pipeline licences must pay annual fees of $6820, $20460, $13640, and $90 per kilometre or part of a kilometre, respectively (regs 5–8). For greenhouse gas storage, holders of holding leases and injection licences must pay annual fees of $6820 and $20460, respectively (regs 9–10). These fees are payable in accordance with the Annual Fees Act (reg 3(1)). The Regulations also remove an exception that previously applied to a cash-bid exploration permit fee, as the Annual Fees Act does not mention this exception (reg 4). The Regulations impose obligations on holders of petroleum and greenhouse gas titles to pay the specified annual fees. Failure to pay these fees within the prescribed timeframe may result in the suspension or cancellation of the relevant title under the Principal Act (s 24). Additionally, the Regulations require that the Commonwealth Government repay the fees collected from these titles to state and Northern Territory authorities to offset the costs of administering the offshore petroleum regime, as stipulated in Section 76 of the Principal Act. While the Regulations do not explicitly outline specific penalties for non-compliance, the Principal Act provides for various offences and penalties for breaches related to petroleum titles. For example, under Section 34 of the Principal Act, failure to pay the prescribed fees may be considered an offence, with potential criminal penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the breach and are determined by the relevant courts. It is important to note that the Regulations themselves do not specify the penalties for non-compliance, and parties should refer to the Principal Act for detailed information on potential consequences.