Regulatory Regime

Western Australia is the only Australian State that has a petroleum code common to both its onshore and offshore areas. The code is similar to that of the Commonwealth Offshore Petroleum and Greenhouse Gas Storage Act 2006, which was established by the Commonwealth Government in conjunction with all Australian State Governments and that of the Northern Territory.

The code varies little between the offshore and onshore, and only where it is necessary to recognise the requirement of other land tenures and usage. This commonality makes for more consistent and expedient administration and is far less confusing for explorers.

The basic premise for this common petroleum code is that all petroleum resources of Western Australia and its adjacent submerged lands are reserved to the Crown, as is the right of access for the purpose of searching for, and recovering these resources.

In this regard, exploration for and production of petroleum is permitted only under the provisions of legislation applying to Western Australia and its adjacent submerged lands:

• Western Australia’s Petroleum and Geothermal Energy Act 1967 (PGERA67) covers all onshore areas of the State, including its islands and, in certain circumstances, areas of submerged lands internal to the State (i.e. those waters landward of the base line), other than ‘subsisting’ permit areas under the Petroleum (Submerged Lands) Act 1982 (PSLA82).
• The Western Australian Petroleum (Submerged Lands) Act 1982 (PSLA82) applies to Western Australia’s territorial sea to the three nautical mile mark, including the territorial sea around State islands, and under certain circumstances, some areas of internal waters. 
• The Commonwealth Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGSA06) applies to the submerged lands of the continental shelf beyond three nautical mile territorial sea boundary, which are designated as being offshore to Western Australia. Both the Petroleum and Geothermal Energy Act 1967 (PGERA67) and the Petroleum (Submerged Lands) Act 1982 (PSLA82) are administered solely by Western Australia, while the Commonwealth Act, in respect to the Western Australian adjacent area is administered by a Joint Authority, comprising the Commonwealth and State Ministers responsible for petroleum administration. The division of State and Commonwealth Waters occurs at the three nautical mile mark of the territorial sea.  Day to day operations in the Western Australia offshore area are the responsibility of the National Offshore Petroleum Titles Administrator (NOPTA) and the National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA) post 1 January 2012.

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Under Australian law, Government rather than private individuals own petroleum rights.

Generally speaking, in Australia’s system, Government does not make petroleum projects happen, or engage in commercial petroleum exploration and development. Whilst these are left to the private sector, Government has four main roles in relation to the petroleum sector:

• It establishes the macro-economic environment (broad economic policy);
• It provides a regulatory framework for exploration, development, project approval processes, safety, environmental assessment and revenue provision;
• It reduces commercial risk in petroleum exploration by generating and disseminating basic geoscientific information; and
• It looks for ways to remove impediments to the industry’s competitiveness.

In the Australian Federal system, both the national Government (the Commonwealth) and the State Governments have important roles affecting petroleum exploration and development:

• The Commonwealth is responsible for broad economic policy and international matters, including personal and company income tax, interest rates, the overall level of Government spending, foreign investment guidelines, trade and customs, commercial corporations and international agreements.
• The State owns and allocates petroleum rights, administers petroleum operations including onshore occupational health and safety, and collects royalties on petroleum produced (the only exception is offshore petroleum seaward of the first three nautical miles of the territorial sea – here petroleum rights are owned by the Commonwealth, but day-to-day administration is still carried out by the State). Because of their shared interest in the contribution of the petroleum sector to national economic well-being, the Commonwealth and State Governments hold regular formal consultations through the Upstream Petroleum Consultative Committee, to ensure policy, standards and regulatory requirements are coordinated.

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