Petroleum (Submerged Lands) (Royalty) Amendment Act 1980

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Legislation au C2004A02282 Not in force Act

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Petroleum (Submerged Lands) (Royalty) Amendment Act 1980

No. 81 of 1980

 

An Act to amend the Petroleum (Submerged Lands) (Royalty) Act 1967

[Assented to 29 May 1980]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title, &c.

1. (1) This Act may be cited as the Petroleum (Submerged Lands) (Royalty) Amendment Act 1980.

(2) The Petroleum (Submerged Lands) (Royalty) Act 1967 is in this Act referred to as the Principal Act.

Commencement

2. This Act shall come into operation on a date to be fixed by Proclamation.

Royalty

3. Section 5 of the Principal Act is amended—

(a) by omitting sub-section (1) and substituting the following sub-sections:

“(1) A permittee or licensee shall, subject to this Act, pay to the Designated Authority a royalty at the prescribed rate in respect of all petroleum recovered by the permittee or licensee in the permit area or licence area in a royalty period commencing on or after the commencement of this sub-section.

“(1a) A permittee or licensee under a permit or licence granted before the commencement of this sub-section is, subject to this Act, liable to pay to the Designated Authority royalty in accordance with the conditions of the permit or licence in respect of all petroleum recovered by the permittee or licensee in the permit area or licence area in a royalty period that commenced before the commencement of this sub-section, to the extent that that royalty was not paid before that commencement.

“(1b) Moneys paid to the Designated Authority, after the commencement of this sub-section, by way of royalty in respect of a permit or licence granted after the commencement of this sub-section, or granted before the commencement of this sub-section and continued in force under the law of the Commonwealth, shall be received by the Designated Authority on behalf of the Commonwealth.”;

(b) by omitting from sub-section (3) “by the Designated Authority”; and


(c) by omitting sub-section (7) and substituting the following sub-sections:

“(7) The prescribed rate in respect of petroleum recovered in the licence area referred to in a licence granted by way of renewal of a licence is the percentage that would be the prescribed rate if the licence so granted were the continuation in force of the previous licence.

“(8) A reference in this section, or in a permit or licence (whether granted before or after the commencement of this sub-section) to royalty at the prescribed rate or royalty at the rate that is for the time being the prescribed rate shall be read as a reference to royalty at the rate that is or was the prescribed rate applicable in accordance with the provisions of this Act, as in force from time to time.”.

4. (1) Section 6 of the Principal Act is repealed and the following section substituted:

Reduction of royalty in certain cases

“6. (1) Where the Designated Authority is satisfied that the rate of recovery of petroleum from a well has become so reduced that, having regard to the rate or rates of royalty applicable under the last preceding section, further recovery of petroleum from that well would be uneconomic, the Joint Authority may, by instrument in writing, determine that the royalty in respect of all or any of the petroleum recovered from that well on or after a date specified in the determination shall be at such rate (being a rate lower than the rate that would be applicable under the last preceding section) as the Joint Authority specifies.

“(2) The prescribed rate in respect of petroleum to which a determination under sub-section (1) is applicable is the rate specified in the determination.

“(3) The Joint Authority may, by instrument in writing, revoke or vary a determination under sub-section (1) and the revocation or variation applies to petroleum recovered on or after such date as is specified in the instrument.”.

(2) A determination made by the Designated Authority before the commencement of this Act under section 6 of the Principal Act continues in force but may be revoked by the Joint Authority in accordance with section 6 of the Principal Act, as amended by this Act.

Ascertainment of quantity of petroleum recovered

5. Section 10 of the Principal Act is amended—

(a) by inserting “from a well” after “licensee” (first occurring); and

(b) by inserting in paragraph (b) “from that well” after “licensee” (twice occurring).

6. (1) After section 10 of the Principal Act the following section is inserted:

Directions by Joint Authority

“10a. (1) The Joint Authority shall give directions to the Designated Authority with respect to the manner in which the Designated Authority is to exercise his powers under sections 8, 9 and 10 and the Designated Authority shall not exercise any of those powers except in accordance with directions so given.


“(2) For the purposes of the application of this section in relation to section 10, paragraph (b) of that section has effect as if the reference to the Designated Authority not being satisfied included a reference to the Joint Authority not being satisfied.”.

(2) The application of the section inserted by this section extends to the exercise of powers of the Designated Authority in respect of a royalty period that commenced before the commencement of this Act (including a period that terminated before the commencement of this Act).

Provisions with respect to Barracouta and Marlin Fields Production Licences

7. (1) Section 12 of the Principal Act is amended—

(a) by inserting after sub-section (2) the following sub-sections:

“(2a) The Joint Authority shall give directions to the Designated Authority with respect to the manner in which the Designated Authority is to exercise his powers under clauses 7, 8 and 12 of a licence to which this section applies and the Designated Authority shall not exercise any of those powers except in accordance with directions so given.

“(2b) A licence to which this section applies has effect as if it contained a provision in accordance with sub-section (2a) and as if the reference in clause 12 (as affected by sub-section (2) of this section) to the Designated Authority being satisfied included a reference to the Joint Authority being satisfied.

“(2c) Moneys paid to the Designated Authority after the commencement of this sub-section by way of royalty in accordance with a licence to which this section applies shall be received by the Designated Authority on behalf of the Commonwealth.”; and

(b) by inserting in sub-section (3) “2,” after “Sections”.

(2) The application of sub-sections (2a) and (2b) inserted by this section extends to the exercise of powers of the Designated Authority in respect of a royalty period that commenced before the commencement of this Act (including a period that terminated before the commencement of this Act).

 

 

Overview

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1980 was enacted by the Commonwealth Parliament to address issues and gaps in the original Petroleum (Submerged Lands) (Royalty) Act 1967. The amendment sought to refine the royalty obligations for petroleum recovered from submerged lands, ensuring clarity and fairness in the payment structure. The policy objective behind this amendment was to provide a more structured and efficient mechanism for the collection of royalties from petroleum activities, whilst also ensuring that the interests of both the Commonwealth and the permittees or licensees were appropriately balanced. By amending specific sections of the Principal Act, the legislation aimed to streamline the royalty payment process and introduce provisions that allowed for the reduction of royalty rates in certain economic conditions, thereby providing flexibility and economic viability to the industry.

Scope and Application

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1980 amends the Petroleum (Submerged Lands) (Royalty) Act 1967, addressing the payment of royalties for petroleum recovered from submerged lands within Australian jurisdiction. The Act applies to permittees or licensees who engage in the recovery of petroleum in permit or licence areas, and it mandates the payment of royalties to the Designated Authority, which receives these payments on behalf of the Commonwealth. The Act's provisions extend to both existing and new permits or licences, ensuring that any unpaid royalties from periods prior to the Act's commencement are also subject to its terms. Additionally, the Act allows the Joint Authority to reduce royalty rates in cases where the economic viability of further petroleum recovery is compromised. This adjustment is made through written determinations that specify the new rates applicable to the affected petroleum. Furthermore, the Act clarifies that the Joint Authority must direct the Designated Authority on the exercise of specific powers, ensuring compliance with these directives in all matters related to royalty assessments and payments. The jurisdictional reach of the Act is national, applying across the Commonwealth of Australia, and it encompasses all submerged lands under Australian jurisdiction. The Act does not explicitly state any exclusions or exemptions, but its application is contingent on the issuance of permits or licences. The Act may also extend its application through subordinate instruments, which provide further details and operational guidelines for its provisions.

Key Provisions

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1980 primarily modifies the Petroleum (Submerged Lands) (Royalty) Act 1967, referred to as the Principal Act. It introduces new provisions and amends existing ones to regulate the royalty payments for petroleum recovered from submerged lands. Section 3 of the Act revises the royalty payment obligations by replacing the existing sub-section (1) with new sub-sections (1), (1a), and (1b), which specify when and how royalties should be paid by permittees or licensees. It also removes sub-section (7) and replaces it with sub-sections (7) and (8), detailing how the prescribed royalty rates should be applied and interpreted. The Act imposes specific obligations on permittees or licensees who must pay royalties at the prescribed rate for petroleum recovered in the permit or licence area. For those with permits or licences granted before the Act's commencement, they must pay any unpaid royalties in accordance with the conditions of their permits or licences. Furthermore, the Designated Authority must follow the Joint Authority's directions when exercising certain powers related to royalty payments. For licences concerning the Barracouta and Marlin Fields, the Designated Authority must also adhere to the Joint Authority's directions in exercising specific powers under the licence, as outlined in section 7. Breaches of the Act's provisions can lead to various consequences. Although the Act does not explicitly outline specific offences or penalties, it operates within the broader framework of Australian law, where non-compliance with legislative requirements can lead to civil or criminal penalties. These penalties can include fines, imprisonment, or both, depending on the severity and nature of the breach. The maximum penalties would be determined according to other relevant laws and regulations that apply to the administration and enforcement of petroleum royalties and licences.

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