The Australian government will make a review into the commercial value of south-east Australian offshore petroleum titles in order develop offshore reserves “as soon as possible,” warning that some companies might lose retention leases if inactive.
Minister for Resources and Northern Australia Matt Canavan has asked the National Offshore Petroleum Titles Administrator (NOPTA) to conduct the review.
“The Coalition Government is working to promote the development of new energy supplies for south-eastern Australia,” Minister Canavan said. “The Australian Government is committed to developing offshore petroleum resources as early as possible.
He said that the key to improved domestic gas supplies and lower prices was increasing gas production and supply competition.
“This could come from bringing offshore deposits in south-east Australia into a production license as well as adopting the Australian Competition and Consumer Commission’s call for state governments to avoid blanket moratoriums of onshore gas developments.
Taking another look at retention leases
Per NOPTA’s definition, a retention lease encourages the timely development of petroleum resources and provides security of title for those resources that are not currently commercially viable but are likely to become so within 15 years.
However, the government has not decided to take another look at the awarded retention leases.
“Re-evaluating the commercial viability of retention leases in the Victorian and Tasmanian offshore areas will determine if there are resources that could be brought into production,” Minister Canavan said.
Minister Canavan also hinted that some companies might lose their offshore blocks in the area.
He said that “if the review determines there are commercially viable resources, the power exists to revoke the retention lease.”
“In that case, the titleholder can then be required to apply for a production license or to surrender the area, in which case it will become vacant acreage and be available for re-release.
“This review is complementary to the Australian Government’s 2017 Offshore South East Australia Future Gas Supply study, which provided detailed analysis of the volumes of gas within offshore south-east Australian basins for potential future input into the east coast domestic gas market.