The Western Australian Government’s review of the petroleum and geothermal energy resources sector began several years ago when it commissioned Dr Tina Hunt of Bond University to conduct an independent review of the regulatory framework for conventional and unconventional petroleum activities in WA. Dr Hunt’s report recommended a number of changes be made to strengthen the regulatory process, and to promote and ensure the long-term recovery of petroleum in Western Australia.
Dr Hunt’s recommendations have slowly been implemented by a suite of legislation introduced by the Government over the past few years. The reform package includes the Petroleum and Geothermal Resources (Resource Management and Administration) Regulations 2014 (RMA Regulations) which deal with onshore petroleum, and the corresponding offshore regulations the Petroleum (Submerged Lands) (Resource Management and Administration) Regulations 2015 (Submerged Lands RMA Regulations). Both of these pieces of legislation are expected to commence operation later this year.
The RMA Regulations were developed with significant public input, with a draft being released last year calling for comments and suggestions by stakeholders. A strong response was received during this consultation period and the RMA Regulations were finalised taking into account the comments received.
The Submerged Lands RMA Regulations were subsequently developed to govern the submerged lands adjacent to the coast of Western Australia, which are still within State waters. These regulations contain provisions which mirror the RMA Regulations, as well as specific changes, which reflect the unique features of the offshore gas sector.
Purpose of the RMA Regulations
The RMA Regulations’ purpose is to establish a risk-based management scheme for the exploration and production of petroleum and geothermal energy resources, by imposing strict approval and reporting obligations on all aspects of petroleum exploration and production. These obligations aim to ensure that all operations are conducted in a proper manner and in accordance with good oil-field practice, so that Western Australia can continue to develop its rich petroleum and geothermal energy resources in the long-term.
The regulations will introduce new resource management and administrative requirements for a variety of activities, including survey activities, well design, field development and data administration.
The RMA Regulations will require title holders to obtain approval prior to commencing any geochemical, geological or geophysical surveys. In most cases, approval will be required 30 days prior to the planned start date of the survey.
The Minister has the power to accept or reject a survey plan outright, or to approve a plan with conditions.
Well design and management
Under the RMA Regulations, title holders will be required to develop well management plans for approval by the Minister, for all well-related activities. These plans will have to receive approval prior to the commencement of the activity. The aim is to reduce the impact of inherent risks in the petroleum industry by requiring planning of pre-emptive action of how to manage and mitigate those risks.
The RMA Regulations propose that all well management plans should include, at a minimum, the following information:
- identification and assessment of all risks associated with the activity and the expected impacts of those risks;
- specific performance objectives and standards to be put in place to combat the identified risks;
- measurement criteria to assess the performance of, and adherence to, the performance objectives and standards; and
- detailed mitigation procedures for all identified risks.
The requirement for a well management plan will not replace or remove any requirements on a titleholder to obtain separate approvals under safety or environmental legislation.
Field development plans
Under the RMA Regulations, the granting of a production licence will not, of itself, entitle a licensee to recover petroleum. The ability of a titleholder to recover petroleum will be dependent on the licensee having a Minister-approved field development plan for the licence area.
In approving a field development plan, the RMA Regulations require the Minister to consider whether the proposed recovery process complies with good oil-field practice and if it promotes the long-term recovery of petroleum from the area.
A field development plan relating to the proposed recovery of unconventional petroleum must also include the proposed strategies for groundwater management. This requirement reflects the strong public concern about the effects of processes such as hydraulic fracturing on the environment.
A titleholder will be expected to provide the Minister with a discovery assessment report within 90 days of discovering a petroleum resource.
The RMA Regulations will also introduce the requirement for an annual assessment report in respect of each title. This requirement for a single report is intended to replace the existing system, where titleholders can be required to produce multiple separate and sometimes duplicate reports under various regulatory regimes. The RMA Regulations also include an option for the Minister to allow an entity that holds multiple titles to report on all of its titles in one report.
The RMA Regulations and the Submerged Lands RMA Regulations are the latest additions to the reform package proposed by Dr Tina Hunt. Other legislation includes the Petroleum and Geothermal Resources (Occupational Health and Safety) Regulations 2010, the Petroleum and Geothermal Resources (Management of Safety) Regulations 2010 and the Petroleum and Geothermal Resources (Environment) Regulations 2012. When completed, it is hoped that the enhanced regulatory process will work better for the oil & gas industry and the State Government.