Key Points:

The Northern Territory Government has announced measures which now form its revised method for how land for oil and gas is released for the oil and gas industry.

On 18 November 2015, the NT Government announced the criteria to be applied to determine whether oil and gas activities can occur in the Territory. This follows the earlier release of the Onshore Oil and Gas Guiding Principles which will be utilised by the NT Department of Mines and Energy for the assessment of future petroleum exploration and production licences. The Guiding Principles and measures will act as an interim measure while the NT Government continues with its review of the existing regulatory framework for this industry.

Trigger for interim measures

Following on from the release of the Report of Inquiry into Hydraulic Fracturing in the Northern Territory in February 2015 which was prepared by Dr Allan Hawke AC, the NT Government commenced both its consultation with the oil and gas industry and community on the draft version of the Guiding Principles and its review of the relevant NT legislation.

The NT Government finalised and released the Guiding Principles as an interim measure for the regulation of oil and gas development in the Territory while it continues with the review of the existing regulatory regime. In conjunction with the Guiding Principles, the recently announced measures are aimed at ensuring onshore oil and gas activities can occur safety and responsibly in the Territory.

The NT Government is also in the process of considering the options to establish a best-practice regulatory framework for the exploration, production and rehabilitation activities of the onshore oil and gas industry in the Territory.

Below we have considered key items in both the Guiding Principles and those measures which have recently been announced.

Overarching guiding principles

Five overarching guiding principles are set out in the Guiding Principles which the oil and gas exploration, production and rehabilitation lifecycle is to be consistent with so as to ensure safety for the public and the preservation of the Territory's environment:

  • Continue to development and implement best practices to ensure the safety of employees and the community.
  • Continue to minimise the effect of the industry on the environment and focus on continuous improvement in environmental risk management.
  • Establish and maintain good relationships with land holders and the broader community; working and negotiating in good faith.
  • Continue to provide transparency in negotiations and operations including water use, chemical use and fugitive emissions.
  • Work to support and realise benefits for the local community including through engaging local suppliers and expertise.

Operational guidelines and additional measures

The Guiding Principles also contain a range of operational guidelines which apply to the following key risks and areas of impact and will need to be considered by any future permit applications:

  • Well design, construction and operation
  • Water management
  • Land access
  • Air and noise emissions
  • Community and social impacts
  • General operations
  • Hydraulic fracturing
  • Chemical and waste handling and management
  • Rehabilitation and decommissioning
  • Local context.

Many of the operational principles contained in the Guiding Principles simply reflect the legislative and regulatory provisions currently in force. However, some of the key items which form those principles and the further measures announced by the NT Government can be summarised as follows:

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Recent permit applications refused

There have already been two oil and gas exploration permit applications which have been assessed using the Guiding Principles and the additional criteria announced by the NT Government. Those applications were for Palatine Energy 's proposal for Watarrka National Park and NT Gas' proposal for the Coomalie Council Region.

It was announced on 24 November 2015 that both applications were refused as they were assessed as not satisfying all of the recently announced criteria.

Proposed timeline

The Guiding Principles sets out the proposed timeline of the review and reforms to the regulatory framework for oil and gas activities. The next steps proposed following on from the release of the Guiding Principles and additional measures announced are:

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What you should do

Operators and investors in the oil and gas industry should consider whether their current and future operations are consistent with the Guiding Principles and consider what implications the recently announced measures will have for future proposals.