Presented by Accessing land for petroleum development – current issues James Plumb, Partner

– 2 – Three key land access challenges  Conduct and compensation negotiations.  Strategic cropping land.  Overlapping tenure.

– 3 – Land Access Framework  Key features of the regime include:  Formal negotiation and alternative dispute resolution procedure;  Minimum conduct standards for resource companies on private land (Land Access Code);  Defined “compensatable effects”.  CCAs must be in place before entry to land to undertake advanced activities.

– 4 – Conduct and Compensation Agreements (CCA)  Notice of Intention to Negotiate an Agreement.  negotiate for 20 business days using “all reasonable endeavours”.  At end of period, either party may refer the matter to conference or ADR.  If the CCA isn’t agreed within a further 20 business days, either party can apply to the Land Court for determination.  Following referral to Land Court, proponent can enter property to undertake activities.

– 5 – CCAs – common issues  Information requests:  future plans;  nature of activities planned.  Extension of terms to include legislative obligations (such as under Environmental Protection Act).  Legal and other costs. Photograph (2011) – Australian Broadcasting Corporation at 28 March 2012.

– 6 – Strategic Cropping Land (SCL)  Restricts activities that can be carried out on prime cropping land (not grazing).  Applies to new applications for tenure made after 30 January applications made prior to 30 January 2012 may be exempt.  SCL status won’t necessarily prevent project – will attract compliance and financial assurance requirements.  Unlikely that projects that have a permanent impact (≥50 years) on SCL will be approved (open cut coal mining).

– 7 – Identifying SCL

– 8 – Overlapping tenure  Current regime allows exploration and production of coal and petroleum to occur on the same land at the same time.  Over 50% of the Bowen Basin is subject to overlapped tenements, Galilee and Surat Basins are around 30%.  Current mechanism for determining priority appears to be broken. Photograph (2010) GLNG as at 28 March 2012.

– 9 – Overlapping tenure  A production lease cannot be granted over land subject to another production lease without consent of the existing lease holder:  veto power.  Where exploration tenure overlaps, some priority is given to the first production lease application made:  competing request for priority can lead to lengthy delay.

– 10 – A new regime?  DEEDI released discussion paper in January 2011 seeking to reform overlapping tenure regime.  Reforms included:  defined process for obtaining ministerial preference decision, including timeframes for the return of a decision;  removing power of producers to automatically veto exploration activities being carried out without providing reasons;  introducing a new form of petroleum tenure to enable CSG producers to retain access to CSG reserves for the purposes of delayed development.  QRC and APPEA currently finalising joint submission on best way forward for both coal and petroleum industries.