Extensions to authorities to prospect (ATPs) and changes to applications for petroleum lease tenures are amongst the reforms introduced by the Land and Other Legislation Amendment Bill 2014 (Qld) (Bill) which was passed on 20 May 2014. 

This legislation is the next stage of reform introduced by the Newman Government which is aimed at providing operational flexibility to petroleum explorers. 

In this Alert, Associate Courtney Smith and Partner Martin Klapper outline the key changes the Bill makes to the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (PG Act) and the impacts on industry stakeholders.

Overview

The material changes include:

  • the introduction of a process to obtain a 2 year extension to ATPs;
  • the introduction of a process to obtain a “special amendment” to the relinquishment requirements and work program for an ATP; and
  • a change to the level of resource knowledge required when applying for a petroleum lease tenure in Queensland.

Two-year extension to ATP work programs

Do you have an ATP which is or will be granted prior to 1 July 2014? Are you the preferred tenderer for an ATP as at 1 July 2014?  Will you become a preferred tenderer for an ATP through a call for tenders which is issued before 1 July 2014 and which closes on 29 September 2014? 

If your answer to any of these questions is ‘yes” and your ATP is for a term of 12 years, you will obtain a two-year extension to the program period automatically.  If your ATP is for a term of less than 12 years, and is not in its last four year term, then you are entitled to apply for a two-year extension to both the term and the program period of the ATP.  The program period is the period for which the work program on the ATP applies.

The result of a two-year extension is that you will have an additional two year period within which to carry out the activities outlined in your work program and you will be relieved of the obligation to relinquish sub-blocks from the ATP until the end of the extended program period. 

Special amendments of ATP relinquishment requirements or work programs

The Bill provides for applications to be made for “special amendments” to relinquishment requirements and work programs for ATPs.  You will be able to obtain a special amendment if the Minister considers the amendment is justified in the circumstances.  The Minister may consider, amongst other things, the optimisation of the development and use of the State’s petroleum resources.

This will provide ATP holders with greater flexibility to obtain amendments to the relinquishment requirements and work program for an ATP, to better suit the ATP holders’ project requirements. 

Resource level of knowledge

Applications for petroleum leases under the amended legislation will simply require a statement by a suitably qualified person that the proposed area of the petroleum lease contains commercial quantities of petroleum.  The Bill does not define what a “commercial quantity of petroleum” is. The “suitably qualified person” need not be independent – an employee or contractor of the applicant can make this statement.

The requirement to have 20% of discovered petroleum as a proved or probable reserve will be removed.

This should certainly make it easier to make a petroleum application earlier in the exploration effort.

Current status of the Bill

The Bill has not yet received Royal Assent.