Petroleum (Submerged Lands) (Royalty) Amendment Act 1991

Overview

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1991 was enacted by the Parliament of Australia to address issues related to the determination of the value of petroleum recovered during a royalty period under the Petroleum (Submerged Lands) (Royalty) Act 1967. The main aim of this amendment was to introduce provisions for provisional payments of royalty when the value of petroleum has not been agreed or determined, and to provide for adjustments in payments when the actual value differs from the provisional value. This Act also ensures that any discrepancies in royalty payments are rectified promptly, either by making additional payments if the actual royalty is higher than the provisional one, or by deducting the difference from future payments if the actual royalty is lower. The policy objective is to maintain a fair and efficient process for the collection of royalties from petroleum recovered from submerged lands, ensuring that the Commonwealth receives appropriate compensation for the use of its resources.

Scope and Application

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1991 is a Commonwealth Act that amends the Petroleum (Submerged Lands) (Royalty) Act 1967. The 1991 Act applies to all petroleum recovered from submerged lands during a royalty period, including periods that commenced before the Act's commencement, provided the value of the petroleum had not been agreed or determined at that time. The Act allows for provisional value determinations to be made by the Designated Authority where the value of petroleum has not yet been agreed or determined. It also provides for adjustments in royalty payments where the final value of petroleum differs from the provisional value or where errors occur in royalty calculations. Importantly, the Act specifies that provisional values operate as if they were agreed or determined values for certain purposes. The Act extends to all petroleum recovered during a royalty period that commences on or after the date of the Act's commencement, and it applies retrospectively to royalty periods that commenced before the Act's commencement if the value of the petroleum had not been agreed or determined at that time. The Act does not explicitly state any exclusions or exemptions, nor does it specify thresholds for its application.

Key Provisions

The Petroleum (Submerged Lands) (Royalty) Amendment Act 1991 amends the Petroleum (Submerged Lands) (Royalty) Act 1967, introducing new provisions concerning the payment and adjustment of royalties for petroleum recovered during a royalty period. Section 3 amends subsection 11(3) of the Principal Act by substituting references to subsections 2 and 11b(2)(a), thereby altering the conditions under which royalties are payable. The Act also introduces new sections 11a and 11b into the Principal Act. Section 11a allows the Designated Authority to determine a provisional value for petroleum when the actual value has not been agreed or determined, treating this provisional value as if it were the agreed value for certain purposes (section 11a(2)). Section 11b addresses the adjustment of royalty payments when the actual value of petroleum differs from the provisional value or when there is an error in the calculation of royalty due (section 11b(1) and (2)). These provisions apply to royalty periods beginning on or after the Act's commencement, as well as to periods that began before the Act's commencement if the value of the petroleum had not been determined at that time (section 4(2) and (3)). The Act imposes obligations on parties involved in petroleum recovery to ensure that royalties are accurately calculated and paid. The Designated Authority is tasked with determining provisional values for petroleum when the actual value is uncertain (section 11a(1)). Additionally, parties must pay any difference if the determined royalty exceeds the provisional royalty, or allow any excess provisional royalty to be deducted from future payments if the determined royalty is less (section 11b(2)). These obligations ensure that the Commonwealth receives the correct amount of royalty owed, either by adjusting payments promptly or allowing for deductions in subsequent payments. Failure to comply with the requirements of the Petroleum (Submerged Lands) (Royalty) Amendment Act 1991 may result in civil or criminal consequences. While the Act does not explicitly outline specific penalties for non-compliance, the failure to accurately calculate and pay royalties could be considered a breach of the terms under which petroleum recovery is licensed. Such breaches might lead to legal action to recover unpaid royalties, interest, and potentially other civil penalties as prescribed by the Principal Act or other relevant legislation. The precise nature and extent of penalties would depend on the specific circumstances and any additional regulations or guidelines issued under the authority of the Principal Act.