What are the rules around drilling for oil or gas offshore?

In Plain English

The rules for offshore oil and gas drilling in Australia are covered by a few different laws.

First, you need permission to explore for petroleum in an offshore area, which is granted via a petroleum exploration permit under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. There are different types of permits, like work-bid, cash-bid, special, and boundary-change permits. If you find a petroleum pool, the government can declare a specific location over the area the pool covers. It's illegal to explore for petroleum without this authorization, and doing so could result in imprisonment.

If you have a permit, you're allowed to explore for petroleum, recover it for appraisal, and carry out necessary operations and works. You might also be allowed to explore for greenhouse gas storage formations and injection sites. These rights are subject to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and its regulations, and the government can add specific conditions to your permit.

During drilling, you need to provide daily reports to the Titles Administrator, including drilling and geological information, as required by the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2025. You also need to manage environmental impacts and safety, as required by the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2023 and the Offshore Petroleum and Greenhouse Gas Storage (Safety) Regulations 2024.

Detailed Explanation

The legislative framework governing offshore petroleum activities in Australia is comprehensive, addressing exploration, environmental management, and safety.

1. Exploration Permits and Rights:

  • Permit Requirement: Section 97 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 prohibits unauthorized exploration for petroleum in offshore areas, with a penalty of imprisonment for up to 5 years.
  • Types of Permits: Section 96 outlines four types of petroleum exploration permits: work-bid, cash-bid, special, and boundary-change permits.
  • Rights Conferred: Section 98 grants permittees the right to explore for petroleum, recover it on an appraisal basis, and carry out necessary operations, subject to conditions specified in the permit (subsection 99(1)). This may also extend to exploring for potential greenhouse gas storage formations and injection sites (subsection 98(3)).
  • Conditions: The Joint Authority can impose conditions on petroleum exploration permits as deemed appropriate (Offshore Petroleum and Greenhouse Gas Storage Act 2006 subsection 99(1)).

2. Reporting Requirements:

  • Daily Drilling Report: Regulation 124 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2025 mandates that petroleum titleholders undertaking drilling operations must provide a daily drilling report to the Titles Administrator by midday on the first business day after the operation day. This report must include specific information outlined in subsection 124(2), such as well name, location, water depth, drilled depth, and details of work carried out. Failure to comply is a strict liability offence (subsection 124(3)) and also incurs a civil penalty (subsection 124(4)).
  • Daily Geological Report: Regulation 125 imposes a similar requirement for a daily geological report if geological information is generated or obtained during drilling operations. The report must include geological information, well details, and a description of the work carried out. Non-compliance also constitutes a strict liability offence (subsection 125(2)) and attracts a civil penalty (subsection 125(3)).

3. Environmental Management:

  • The Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2023 regulate the environmental management of petroleum and greenhouse gas activities in offshore areas.
  • The object of these regulations is to ensure activities are consistent with ecologically sustainable development and that environmental impacts and risks are reduced to as low as reasonably practicable and are of an acceptable level (section 4).
  • Offshore projects, defined as activities undertaken for the recovery of petroleum other than on an appraisal basis, are subject to these regulations.

4. Safety Regulations:

5. Interference with Other Rights:

  • Section 280 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 requires that activities carried out under a petroleum exploration permit (or other titles) do not interfere with navigation, fishing, conservation of resources, or other lawful activities to a greater extent than necessary. Breaching this requirement is an offence (subsection 280(3)) and incurs a civil penalty (subsection 280(5)).

6. Underwater Cultural Heritage (UCH):

7. Petroleum Safety Zones: