This article was written by Scott Langford, Dominic Townsend and Luci Kjar-Crutterden
After nearly 7 years in the wilderness, onshore petroleum permit holders in Victoria will get the chance to recommence conventional gas exploration activities from 1 July 2021, marking the end of the moratorium that was put in place by the Victorian Government in 2014. The Government hopes this will unlock up to 830 petajoules of gas, particularly in the Otway and Gippsland basins.
The following are the key issues and developments that petroleum exploration permit holders and other stakeholders should be aware of in preparation for the end of the moratorium:
- Public consultation for new regulations - The new draft Petroleum Regulations will be released shortly (expected early May 2021) for public consultation through the ‘Engage Victoria’ website;
- 5 year term reset - The existing term of petroleum exploration permits will ‘reset’ for a term of 5 years from the date the ban is lifted, ending on 1 July 2026. The term of retention leases will also reset from that date;
- Operational plans – Before recommencing activities, permit holders must either vary their existing operation plan or submit a new operation plan which must be approved by the Minister;
- Well Management Code – A new well management code, based on the Queensland and Northern Territory codes will be included in the new Petroleum Regulations;
- Fracking ban locked in – On 16 March 2021, the ban on hydraulic fracturing was enshrined in the Victorian Constitution; and
- Applications for production licences and retention leases – The Petroleum Act amendments (passed in June 2020) require submissions from the Victorian community and prescribe the social, environmental and economic factors to be taken into account in relation to decisions to grant a production licence or retention lease.
In this Alert, we provide a brief update on the upcoming public consultation process for the proposed replacement of the Petroleum Regulations 2011 (Vic) (“Petroleum Regulations”), as well as a ‘refresher’ on the changes to the Petroleum Act, which were passed under the Petroleum Legislation Amendment Act 2020 (Vic) (“Petroleum Amendment Act”) in June 2020.
If you have any questions about how these latest developments might affect your business, or require any assistance with submissions for the public consultation process, please do not hesitate to get in touch.
The new Petroleum Regulations and public consultation process:
- The Petroleum Regulations will be amended based on recommendations received from the independent stakeholder advisory panel for the ‘Victorian Gas Program’:
- The Department of Jobs, Precincts and Regions (“Department”) recently confirmed to us that the draft Petroleum Regulations and associated Regulatory Impact Statement (“RIS”) will be published on the Victorian Government’s online consultation platform, ‘Engage Victoria’, in the first week of May. Upon release of the draft Petroleum Regulations and RIS, the public consultation process will commence.
- Details of the public consultation process are as follows:
- the Public Consultation process will be conducted through the ‘Engage Victoria’ website;
- the Victorian Government will accept public submissions in respect of the draft Petroleum Regulations and RIS and will also post a series of questions through ‘Engage Victoria’ that will be open for responses from the public;
- the submissions must be focused on the specific draft Petroleum Regulations and the associated technical specifications under the regulations, and should not include broader political points or opinions; and
- there will be no limit on the length of submissions.
- We understand from the Department that there is currently no set due date for the submissions nor any set duration for the public consultation process. The existing Petroleum Regulations are scheduled to end on 24 May 2021. However, the Department has advised that interim Petroleum Regulations, which are largely similar to the existing Regulations, will apply between 25 May 2021 and 1 July 2021, at which point in time, the new Petroleum Regulations are due to be introduced. As such, we expect that the timeframe for providing submissions will be limited.
- The Department advised that the Victorian Government is currently developing a ‘Code of Practice’ for ‘Well Management’ (“Code”), which seeks to implement technical specifications around well construction, design, safety and integrity. The Code will be based on the equivalent Queensland and Northern Territory ‘Well Management’ Codes, which are, in turn, based on the widely accepted Norwegian NORSOK standard D-010 for well integrity. We note that the Code is expected to be released with the draft Petroleum Regulations and RIS for public consultation.
‘Refresh’ on the Petroleum Amendment Act changes and what they mean for you:
 The Hon Russell Northe MP, Minister for Energy & Resources and Minister for Small Business, Onshore gas exploration on hold as consultation continues (Press Release, Victorian Government, 28 May 2014).
 Petroleum Legislation Amendment Act 2020 (Vic) ss 7, 15.
 Ibid, ss 10, 12.
 Ibid, ss 11, 13.
 Ibid, s 29.
 Ibid, s 28.
 Ibid, s 29.
 Ibid, s 31.
 Constitution Amendment (Fracking Ban) Act 2021 (Vic) s 4.