Understanding retention and development titles

Petroleum Production Licences

Pipeline construction, Pilbara region, Western Australia
Pipeline construction, Pilbara region, Western Australia

Where a commercial discovery is made, explorers have a statutory right to the granting of a Production Licence. These Licences are granted for an indefinite term (subject to termination provisions if no operations for the recovery of petroleum under the licence have been undertaken during a continuous period of five years).

Production Licences provide holders with exclusive rights to carry out operations for the recovery of petroleum within the licence area, in accordance with an approved Field Management Plan and individual activity work approvals.

For more information on Production Licence (page 85).

Geothermal Production Licences

This Licence authorises the holder to recover geothermal energy from the licence area, explore for geothermal energy and carry on such operations as are necessary. Geothermal Production Licences are granted over the blocks comprising a commercial geothermal energy resource and usually emanate from a Geothermal Exploration Permit, Drilling Reservation or Retention Lease. Geothermal Production Licences are subject to conditions imposed on the grant of title and granted for an indefinite term subject to the provisions of the Petroleum and Geothermal Energy Resources Act 1967.

Petroleum Retention Leases

Retention Leases are awarded for non-commercial petroleum discoveries. Applicants must demonstrate the resource is not currently commercially viable, but is likely to become so within the next 15 years. The initial term of a Retention Lease is five years and may be renewed provided it still meets the non-commerciality criteria.

When the discovery is deemed commercial, the Retention Lease must be converted to a Production Licence. At any time during the five-year term of the lease, the State Government can request a review of the commercial viability of the field.

Geothermal Retention Leases

Welder working on pipeline construction, Western Australia
Welder working on pipeline construction, Western Australia

These Leases act as holding titles that also authorise holders to continue to explore for geothermal energy. They allow holders to carry on these operations and execute such works as are necessary.

Retention Leases are granted over the blocks comprising a geothermal energy resource, which is currently not economic. Depending on circumstances further exploration work may be undertaken. However, the lessee is obliged to undertake re-evaluation studies on the commercial viability of the geothermal energy resource as required from time to time by the Minister.

Pipeline Licences

A petroleum pipeline is defined as a pipe or system of pipes used for the conveyance of petroleum and includes all structures for protecting or supporting a pipeline. Pipelines are generally associated with petroleum production facilities or high pressure natural gas distribution lines. Pipeline Licences can be applied for by any party. However, under WA’s Petroleum (Submerged Lands) Act 1982, the holder of the resource that the pipeline is intended to service, has a right of first option.

Pipelines under the Petroleum Pipelines Act 1969 (PPA69) and Petroleum (Submerged Lands) Act 1982 are granted for an indefinite term. A Pipeline Licence, being restricted to onshore areas, is likely to coexist with other land tenures; accordingly a licence enables the holder to construct a pipeline only over land which it has acquired by easement, purchase or some other authorisation.

The area required for a Petroleum Pipelines Act Pipeline Licence varies but is usually a narrow corridor of about 30 metres for access purposes. Pipeline Licences are subject to stringent safety and environmental conditions and audits. Read more about a Pipeline Licences (page 86).

Infrastructure Licences

Infrastructure Licences are only available under the Petroleum (Submerged Lands) Act 1982. The Licences enable the handling and processing of petroleum outside a Production Licence area but within the offshore area. The Licences can cover vacant areas or areas held under other Petroleum Titles. Its area is defined as a place and does not involve the block system of granting titles.

As with Production Licences and Pipeline Licences, any party can apply for an Infrastructure Licence. The holder of the petroleum resource is not given exclusivity to apply for an Infrastructure Licence as a processing facility may receive petroleum from a variety of sources.

The grant of an Infrastructure Licences is at the discretion of the State Government and all relevant circumstances will be considered.

Registered holder's obligations

State legislation requires all registered holders must carry out operations according to good oilfield practice, including carrying out operations in a manner that is safe and prevents the escape of petroleum into the environment. Operations must also be conducted in a manner that do not unnecessarily interfere with the surface of land or any improvements or other persons’ lawful activities. In order to retain title, conditions of work and compliance with directions must be met, data and reports submitted and annual fees paid.

Summary of Petroleum and Geothermal Titles
Title Term Area Rights Obligations
A summary of the obligations and conditions of each licence type under State legislation is provided here.
Petroleum Production
Licence (L)

Indefinite term commensurate with production plus 5 years.
Corresponds to size of discovery, in blocks.
  1. To recover petroleum
  1. To recover petroleum in accordance with direction of Minister.
  2. To continue to explore licence area.
  3. To conduct operations in accordance with good oilfield practice.
  4. To provide for safety of workers.
  5. Comply with environmental Management Plan.
  6. To pay annual fee and royalties.
Petroleum Retention Lease (RL) 5-year term. Right of renewal for subsequent 5-year periods. Corresponds to discovery, in blocks.
  1. To explore for petroleum to convert to a Production Licence once economic viability confirmed.
  1. As for Exploration Permits but also obliged to conduct economic viability studies as requested.
Geothermal Production Licence (GL) These Titles have similar terms, areas, rights and obligations to those of the above Petroleum Titles and can coexist with Petroleum Titles
Geothermal Retention Lease (GRL
Pipeline Licence (PL) Term commensurate with conveyance operations plus 5 years.
Area necessary to accommodate pipeline and associated facilities, e.g. pumping stations, storage tanks.
1. To construct and operate a pipeline for the purpose of conveying naturally occurring hydrocarbons
  1. To construct and operate pipeline in accordance with the requirements of the Act, regulations, direction
  2. and conditions of licence. To act as common carrier should Minister so determine.
  3. To conduct operations in accordance with good oilfield practice.
  4. To provide a safe working environment for employees.
  5. To provide for the protection of the environment.
  6. To not unduly interfere with other land uses or activities.
  7. To pay annual fee.
Infrastructure Licence (IL) (PSLA82 only) Indefinite term commensurate with remote production operations and/ or processing plus 5 years. Area of facility.
  1. Construct and operate a facility for remote production operations and/or processing.
  1. To construct and operate a facility for remote production operations and/or processing of petroleum in accordance with the Act, regulations, directions and conditions of licence. To conduct operations in accordance with good
  2. oilfield practice.
  3. To provide for the safety of workers.
  4. To provide for protection of the environment.
  5. To pay annual fee.