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Onshore Oil and Gas Requirements

Onshore oil and gas exploration, development and production approvals are issued and administered under the Petroleum Act 1998 and Petroleum Regulations 2000. Petroleum is defined as any naturally occuring mixture of hydrocarbons, whether it is in a gaseous, liquid or solid state; and includes hydrocarbon mixtures with sulphide, nitrogen, helium or carbon dioxide.

An overview of the Tenement process under the Petroleum Act 1998

Overview of Petroleum Tenement Process Overview of Petroleum Tenement Process (GIF 55.2 KB)GIF icon

Tenements granted under the Petroleum Act 1998 are:-

Exploration Permit

An exploration permit authorises the holder to carry out petroleum exploration and do any thing necessary for, or incidental to, this purpose (does not include Coal Bed Methane this is administered under the Mineral Resources Development Act 1990).

The Minister for Energy and Resources publishes areas of vacant acreage from time to time in the Victoria Government Gazette, inviting tender applications for exploration permits. As well, anyone can request Earth Resources Regulation to release a particular area of their interest. The tendering process allows up to 6 months for the applicants to examine the data available from Earth Resources Regulation before lodging applications based on offers to perform specified work programs.

The respective merits of the work programs; applicant's financial and technical ability to carry out the proposed work program; and any other criteria mentioned in the tender are taken into account in awarding the permit to the successful applicant.

In granting the permit, certain elements of the work program submitted are declared as key objects. The permittee should ensure that these key objects are achieved to the maximum extent that is practicable.

An exploration permit is granted over a maximum area of 12,500 square kilometres and for a period of five years. The permit can be renewed once for another five years with a reduction in area of at least 50%.

The Permit Conditions and Administration Guideline aims to assist industry in managing the administration of an exploration permit under the Petroleum Act 1998. The criteria used by the Earth Resources to assess applications are also outlined. It is anticipated the Guideline will be amended from time to time.

Retention Lease

Only the holder of an exploration permit can apply for a retention lease within the area of the permit, after making a petroleum discovery.

A retention lease enables the holder to retain certain rights to a petroleum discovery that it is not commercially viable to develop, but might become viable within 15 years.

A retention lease can be granted for a term of up to 15 years and cannot be renewed.

The Minister may request the lessee to re-evaluate the commercial viability of the petroleum production at any time during the term of the lease. Subsequently, if the Minister is of the opinion that extraction of the petroleum is commercially viable, the Minister may direct the lessee to apply for a production licence for the purpose of extraction of petroleum.

Production Licence

A production licence authorises the holder to produce and explore for petroleum from the licence area, and to do anything that is necessary or incidental to, this purpose.

The holder of an exploration permit or a retention lease can apply for a production licence within the permit or lease area. The Minister can also invite applications for a production licence over an area, which is not part of any exploration permit or retention lease, when a reservoir/s is already known to exist.

A production licence continues in force for the life of the resource or until surrendered or cancelled.

The holder of a production licence can construct pipelines called gathering lines to convey petroleum from one place to another within the licence area. The Minister may exempt a gathering line from provisions from the Pipelines Act 2005 and consent to its construction

Special Access Authorisations

A special access authority gives the holder the right to carry out petroleum exploration, as specified in the authorisation, but does not include the right to drill a well, or rights to petroleum in the area.

A special access authority is granted for a period up to one year and can be extended for another year.


The following Guidelines describe processes relevant to landowners and companies. They answer some common questions made by landowners and interested parties.

  • Pipelines - Landowner Questions Answered
  • Advice on Acquisition of Pipeline Easements
  • Compulsory Acquisition of Easements for Pipelines
These documents are located on the Landholders Information page.

  • Petroleum Titles & Native Title 2003

This document is located on the Native Title page.

Other approvals

Before carrying out petroleum exploration or production the holder of a tenement must seek additional approvals (refer to section 147 of the Act and the Petroleum Regulations 2000).

All tenements issued under the Petroleum Act 1998 can be varied and transferred to another party with the approval of the Minister.

Creating agreements and assigning interests to other parties are registered against tenements

Assessment Criteria

The assessment criteria for work program bidding applications lodged under the requirements of the Victorian Petroleum Act 1998 are currently under revision.

For further information please contact us.


The Minerals and Petroleum Regulation Branch maintains a petroleum register, which is a registration record of approvals, agreements, transfers, surrender and cancellation of tenements. The Register may be inspected at the Minerals and Petroleum Business Centre, located on level 16, 1 Spring St, Melbourne Victoria 3000.

Related Links

Onshore Pipelines Approvals