Presented by

Accessing land for petroleum development – current issues

James Plumb, Partner

– 2 –

Three key land access challenges

Conduct and compensation negotiations.

Strategic cropping land.

Overlapping tenure.

– 3 –

Land Access Framework

Key features of the regime include:

Formal negotiation and alternative dispute resolution procedure;

Minimum conduct standards for resource companies on private land (Land Access Code);

Defined “compensatable effects”.

CCAs must be in place before entry to land to undertake advanced activities.

– 4 –

Conduct and Compensation Agreements (CCA)

Notice of Intention to Negotiate an Agreement. negotiate for 20 business days using “all reasonable endeavours”.

At end of period, either party may refer the matter to conference or ADR.

If the CCA isn’t agreed within a further 20 business days, either party can apply to the Land Court for determination.

Following referral to Land Court, proponent can enter property to undertake activities.

– 5 –

CCAs – common issues

Information requests: future plans; nature of activities planned.

Extension of terms to include legislative obligations (such as under Environmental Protection Act).

Legal and other costs.

Photograph (2011) – Australian Broadcasting Corporation <http://http://www.abc.net.au/rural/news/content/201111/s3354084.htm> at 28 March 2012.

– 6 –

Strategic Cropping Land (SCL)

Restricts activities that can be carried out on prime cropping land (not grazing).

Applies to new applications for tenure made after 30 January 2012 - applications made prior to 30 January 2012 may be exempt. SCL status won’t necessarily prevent project – will attract compliance and financial assurance requirements.

Unlikely that projects that have a permanent impact (≥50 years) on SCL will be approved (open cut coal mining).

– 7 –

Identifying SCL

– 8 –

Overlapping tenure

Current regime allows exploration and production of coal and petroleum to occur on the same land at the same time.

Over 50% of the Bowen Basin is subject to overlapped tenements, Galilee and Surat Basins are around 30%.

Current mechanism for determining priority appears to be broken.

Photograph (2010) GLNG <http://www.glng.com.au/Content.aspx?p=58> as at 28 March 2012.

– 9 –

Overlapping tenure

A production lease cannot be granted over land subject to another production lease without consent of the existing lease holder:

veto power.

Where exploration tenure overlaps, some priority is given to the first production lease application made:

competing request for priority can lead to lengthy delay.

– 10 –

A new regime?

DEEDI released discussion paper in January 2011 seeking to reform overlapping tenure regime.

Reforms included:

defined process for obtaining ministerial preference decision, including timeframes for the return of a decision;

removing power of producers to automatically veto exploration activities being carried out without providing reasons;

introducing a new form of petroleum tenure to enable CSG producers to retain access to CSG reserves for the purposes of delayed development.

QRC and APPEA currently finalising joint submission on best way forward for both coal and petroleum industries.