Offshore oil and gas authorities

Offshore oil and gas operations may be conducted in State or Commonwealth waters.

State waters

The Offshore Petroleum and Greenhouse Gas Storage Act 2010 (the State Act) provides the legislative framework for regulating offshore oil and gas exploration and development activities within State waters (located within three nautical miles – or 5.56km – of the Victorian coast).

Legislation

Note that under the State Act:

Commonwealth waters

The Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the Commonwealth Act) provides the legislative framework for regulating offshore oil and gas exploration and development activities in Commonwealth waters (located beyond three nautical miles of the Victorian coast).

Legislation

Note that under the Commonwealth Act:

  • the National Offshore Petroleum Titles Administrator (NOPTA) is responsible for titles administration, data management and resource management
  • NOPTA also provides administrative and technical advice on titles and resource management matters to the Joint Authority between Commonwealth and State Government ministers, which they may accept or reject (in the case of disagreement, the Commonwealth minister’s view prevails)
  • NOPSEMA is responsible for the administration of environmental regulation in Commonwealth waters (in addition to its safety and facility, structure and installation integrity responsibilities).

Authority requirements for Victorian State waters

Offshore oil and gas exploration and development authorities are issued and administered under the Offshore Petroleum and Greenhouse Gas Storage Act 2010. The relevant authorities are required when targeting petroleum. The State Act allows for variation, suspension or extension, and exemption from compliance with conditions. All applications are considered on a case-by-case basis.

Authorities granted under the Offshore Petroleum and Greenhouse Gas Storage Act 2010

Petroleum exploration permit

A petroleum exploration permit authorises the holder to explore for oil and gas, to recover oil and gas on an appraisal basis, and to undertake operations necessary for these purposes.

Petroleum acreage in Victoria is acquired via a competitive bidding process. Areas of vacant acreage are published in the Victoria Government Gazette and tenders for exploration permits invited. Read more about acquiring petroleum acreage.

An exploration permit is initially granted for a period of six years, with the possibility of being renewed for further terms of five years. The exploration area is reduced by 50 per cent each time the permit is renewed.

The permit sets out a work program consistent with the exploration strategy and underpinned by the technical evaluation of the area. The program only includes work to be undertaken within the permit area.

Petroleum retention lease

The holder of a petroleum exploration permit can, after making an oil or gas discovery and declaring its location, apply for a petroleum retention lease over the block(s) subject to the declaration of location.

A petroleum retention lease enables the lessee to retain certain rights to an oil or gas discovery where it is not currently commercially viable to develop it, but is likely to become so within 15 years. A retention lease is granted for an initial five-year term.

The lease can be renewed for further terms of five years. Each renewal application must set out the proposed work and expenditure in the lease area, and the current and possible future commercial viability of recovering oil or gas from the lease area.

The minister may, once during each term of the lease, request the lessee to re-evaluate the commercial viability of recovering oil or gas.

Subsequently, if the minister is of the opinion that recovery is commercially viable, the minister may issue the lessee with a notice proposing to revoke the petroleum retention lease. This should allow sufficient time for the lessee to apply for a petroleum production licence.

Petroleum production licence

A petroleum production licence authorises the licensee to explore for and recover oil or gas in the licence area, and to undertake operations necessary for these purposes.

The holder of a petroleum exploration permit can apply for a production licence over the block(s) subject to a declaration of location. The holder of a petroleum retention lease can apply for a production licence over any block(s) of the lease.

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

Infrastructure licence

An infrastructure licence authorises the licensee to construct and operate infrastructure (i.e. a facility, structure or installation) that either:

  • rests on the seabed
  • is fixed or connected to the seabed (whether it is floating or not)
  • is attached or tethered to a facility, structure or installation.

The infrastructure must also be used for any one of the following petroleum activities:

  • remote control of facilities used to recover petroleum (i.e. oil or gas)
  • processing petroleum recovered in any place
  • storing petroleum before being processed to another place
  • preparing petroleum for transport to another place.

The infrastructure may also be used for greenhouse gas activities. For further details, contact Earth Resources Regulation.

An infrastructure licence continues in force indefinitely or until it is surrendered or cancelled.

Pipeline licence

A pipeline licence authorises the licensee to construct and operate a pipeline in any area of Victorian State waters. A pipeline may be used to convey petroleum (i.e. oil or gas) or a greenhouse gas substance.

A pipeline licence continues in force indefinitely or until it is surrendered or cancelled.

Petroleum special prospecting authority

A special prospecting authority may be granted over any block(s) so long as no exploration permit, retention lease or production licence is in force over the block(s).

The holder of a special prospecting authority can undertake oil and gas exploration operations in the authority area but cannot make a well.

A special prospecting authority can be granted for a period up to 180 days. It cannot be renewed or transferred.

Petroleum access authority

An access authority may be granted over any block(s) in Victorian State waters.

The holder of an access authority can undertake certain operations in the authority area relating to oil and gas exploration and recovery but cannot make a well. The exception to this is a deviation well that enters an adjacent area subject to a permit, licence or lease held by the same authority holder.

An access authority can be granted for a period specified by the minister and can be extended at the minister’s discretion.

Petroleum scientific investigation consent

A scientific investigation consent may be granted over any block(s) in Victorian State waters.

The holder of a scientific investigation consent can undertake oil and gas exploration operations during the course of conducting a scientific investigation. Consent can be granted for a period specified by the minister.

Administration matters – dealings and transfers

A dealing has no force until it is approved and registered for an existing title.

Applications to transfer a title must be submitted for approval and registration in the petroleum register. A transfer has no force until it is approved and registered.

Transfer applications must be accompanied by:

  • the instrument of transfer in the prescribed form executed by each registered holder and transferee, and
  • details of the technical qualifications of the transferee(s), the technical advice available to the transferee(s) and financial resources available to the transferee(s).

For further details, contact Earth Resources Regulation.

Useful links

State

Commonwealth

Page last updated: 30 Aug 2022