Recent successes in West Australian petroleum projects, such as Strike Energy and Warrego Energy’s West Erregulla-2 well in the Perth Basin, highlight WA’s significant contribution to increased exploration expenditure in the oil and gas industry. In addition, the WA Government last week formally implemented the partial lifting of the fraccing ban on pre-existing petroleum titles in line with the initial policy announcement on 27 November 2018 and the Implementation Plan commitments made in July 2019 in response to the 2018 inquiry on hydraulic fracture stimulation in Western Australia.
WA petroleum largest contributor to growth in petroleum exploration trend estimates
Statistics released last week by the ABS show that both the national trend estimate and seasonally adjusted estimate for total exploration expenditure rose in the June 2019 quarter. The trend estimate rose by 2.8% ($8.5m) to $314.1m, and the seasonally adjusted estimate rose by 42.7% ($105.7m) to $353.0m. Western Australia was the largest contributor to the rise of both estimates, recording increases of 11.4% ($19.7m) and 131.2% ($138.9m), respectively.
WA Government partially lifts ban on hydraulic fracturing
On 6 September 2019, the Western Australian Government’s partial lifting of the moratorium on hydraulic fracturing production in Western Australia formally came into effect with the Gazettal of the Petroleum and Geothermal Energy Resources (Hydraulic Fracturing) Amendment Regulations 2019 (WA).
Hydraulic fracturing activities may only be undertaken on current petroleum titles (exploration permits, retention leases and production licences) that were in force on 26 November 2018, and have been continuously in force since that date. A map of the affected tenements can be found here.
Importantly, the ban has not been lifted over pre-existing petroleum permit applications which have not yet been granted.
Hydraulic fracturing is still prohibited in the metropolitan, Peel and South West regions, and is additionally now also prohibited:
- in the Dampier Peninsula;
- in national park areas; and
- within two kilometres of gazetted public drinking water source areas.
Though the remaining Implementation Plan commitments will not formally come into effect until December 2020, we understand that the current Government policy is being implemented by the Department of Mines, Industry Regulation and Safety which will require all individual activity approvals which involve hydraulic fracturing to be both referred to the Environmental Protection Authority for assessment and also require the consent of private land holders and traditional owners.
Look out for the HopgoodGanim Resources & Energy team at the RIU Good Oil Conference which kicks off in Perth tomorrow.