Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2018

Thursday 19 April 2018 @ 10.43 a.m. | Legal Research

On 28 March 2018, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2018 (Cth) (‘the Bill’) was introduced in the House of Representatives in the Commonwealth Parliament. The Bill is for the purpose of making changes relating to regulatory responsibility for offshore greenhouse gas wells and environmental management, and for clarifying the powers of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Main Amendments

This Bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (‘the Act’) to make provisions for:

  • The transfer of regulatory responsibility of offshore greenhouse gas wells and environmental management from the responsible Minister to the NOPSEMA;
  • The strengthening and clarification of the powers of NOPSEMA inspectors for monitoring and enforcement purposes;
  • The ensuring of valid designation of areas as ‘frontier areas’ for the purposes of the Designated Frontier Area tax incentives;
  • The making of minor technical and policy amendments for improvement of the Act.

Minister's Statements

In his second reading speech, Dr John McVeigh, Minister for Regional Development, Territories and Local Government stated:

“The amendments will expand and clarify the categories of premises that inspectors may enter without a warrant to monitor compliance with environmental and occupational health and safety obligations. This will include premises of a body corporate that is related to a titleholder, such as a parent company which may make decisions about operations carried out under that title. It will also include the premises of titleholders' contractors, including entities who have agreed to provide response equipment in the event of an oil spill. The amendments in this bill will also enable inspectors to undertake inspections without a warrant to monitor compliance by titleholders with well integrity related obligations under the act and regulations, equivalent to existing powers that inspectors may exercise to conduct environmental or OHS inspections.”

On the amendment to designate areas as 'frontier areas', Dr McVeigh noted that the proposed changes would correct a recently discovered administrative oversight:

"The DFA tax incentive was designed to encourage petroleum exploration in Australia's remote offshore areas. It was active between 2004 and 2009. Under the scheme, the resources minister could designate up to 20 per cent of each year's offshore petroleum acreage release areas as 'frontier areas'. Where a permit was awarded over an area designated as a frontier area, the registered holder or holders of the permit could claim up to 150 per cent of exploration expenditure as a deduction for the Petroleum Resource Rent Tax."

He stated that the amendment would remove doubt regarding entitlement to deductions under the Petroleum Resource Rent Tax Assessment Act 1987 (Cth) ('the PRRT Act'), saying:

"This bill will amend the act to retrospectively designate these areas as frontier areas. This will remove any doubt that the relevant titleholders are entitled to the uplifted PRRT deductions. No persons will be disadvantaged by retrospective application."

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Sources:

Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2018 (Cth), and associated second reading speech and explanatory memorandum as published on TimeBase LawOne.

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