Bills Digest no. 70 2007–08
Offshore Petroleum Amendment (Miscellaneous Measures)
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
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Offshore Petroleum Amendment (Miscellaneous
Measures) Bill 2008
introduced: 13 February
House: House of Representatives
Portfolio: Minister for Resources, Energy and
Sections 1-3 - on
Schedule 1 Parts 1-7,
items 24-31, 33-41 immediately after commencement of section 3 of
the Offshore Petroleum Act 2006.
Schedule 1 item 32
immediately after commencement of subsections 22(3) and (4) of the
Offshore Petroleum Act 2006.
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed, they can be found at ComLaw, which is
The Offshore Petroleum
Amendment (Miscellaneous Measures) Bill 2008 (the Bill) is being
reintroduced by the new Federal government.
The Offshore Petroleum Amendment (Miscellaneous Measures) Bill
2007 (the 2007 Bill) had been introduced into the Senate on 15
August 2007 and was passed by the Senate on 13 September 2007.
However, the 2007 Bill did not progress further before Parliament
was prorogued on 15 October 2007.
The Bill has three primary objects, which are to:
- correct technical errors in the Offshore Petroleum Act
2006 (the Offshore Petroleum Act)
- implement a policy change by repealing section 327 of the
Offshore Petroleum Act, which relates to declarations of emergency
by the Commonwealth Minister, and
- convert geodetic data references of area descriptions in
Schedules 1 and 2 of the Bill to the Geocentric Datum of Australia
Please refer below for meanings of technical
The Offshore Petroleum Act is intended to replace the
long-standing Petroleum (Submerged Lands) Act 1967 (the
Petroleum (Submerged Lands) Act). It is essentially a revamp of the
Petroleum (Submerged Lands) Act and does not introduce any major
policy changes. The Petroleum (Submerged Lands) Act has been the
primary legislation for the administration of Australia's offshore
petroleum resources for 40 years and, through age and many
amendments, it has become complex and unwieldy.
The Offshore Petroleum Act was assented to on 29 March 2006.
However, the main provisions of the Offshore Petroleum Act have not
yet come into force and are not expected to do so before this Bill
comes into force.
Further background on both Acts, including Commonwealth, State and
Territory cooperative arrangements, can be found in the Bills
Digest for the Offshore Petroleum Act.
According to the explanatory memorandum, a geodetic
datum is a
mathematical model of the world.
The previous geodetic datum was designed for the mainland and
its centre was not the centre of the earth.
However, new global positioning systems are more suited to an
earth centred or geocentric datum.
The conversion to the geocentric datum means that the same point
on the earth now has different coordinates. These are built into the
The 2007 Bill was referred to the Senate Standing Committee on
Economics (the Committee) by the Senate on 16 August 2007.
The Committee received one submission in relation to the 2007
from the Australian Petroleum Production & Exploration
Association Limited (APPEA). APPEA supported the intent of the 2007
Bill on the basis that the amendments were mainly of a technical
The Committee recommended that the Senate pass the Bill largely
due to the amendments being essentially technical in nature and the
lack of concerns raised in submissions.
According to the Explanatory Memorandum, there are no financial
implications to the Government as most of the amendments are purely
The Explanatory Memorandum to the Bill submitted that the
conversion to geocentric datum will have no impact on existing
titles as it represents a shift of not more than plus or minus 0.15
metre. It is
noted that the Committee accepted this information.
According to the Explanatory Memorandum, there will be no new
regulatory burdens on the petroleum industry imposed by the
This digest will focus on key amendments proposed by the
Items 1, 2 and 4 set out three amendments to
section 6, as well as subsections 139(1)
(table item 3) and 139(3) of the Offshore Petroleum Act
that deal with the duration of production licences.
Item 3 inserts a new
subsection 139(1) (table item 3A).
It was government policy that production licences be renewed
under these provisions (and their equivalent in the Petroleum
(Submerged Lands) Act) and that first renewals of production
licences be for 21 years. However, due to drafting ambiguity in the Petroleum
(Submerged Lands) Act, production licences due for their first
renewal were entitled to be renewed for an indefinite duration
instead of 21 years. The amendments will ensure that, once the Offshore
Petroleum Act replaces the Petroleum (Submerged Lands) Act), those
production licences that were renewed for an indefinite duration at
first renewal are preserved, but any subsequent renewals will only
be granted for a 21 year term.
Items 7-18 propose amendments to correct
technical errors in relation to the terms territorial sea and
coastal waters , thereby ensuring that sea boundaries continue to
be determined as agreed to in the Offshore Constitutional
These amendments relate to the accepted territorial sea baseline
that applies to the Offshore Petroleum Act. It is proposed that the
definition of coastal waters would include that for the purposes of
the Offshore Petroleum Act, the breadth of the territorial sea of
Australia is three, not 12, nautical miles.
Item 19 proposes to correct a technical error
in subsection 142(6) of the Offshore Petroleum
Act, to the effect that the requirement that applications for
either production licences, or variations to such applications,
must both be accompanied by work and expenditure proposals.
Existing subsection 142(6) implies the requirement only applies to
Items 20 and 21 propose to repeal
section 327 and a preceding note
(referring to section 327) in section 326 of the
Offshore Petroleum Act.
Section 327 relates to states of emergency and
declarations of a state of emergency by the Commonwealth Minister
(the Minister for Resources, Energy and Tourism). Such declarations
can be made in respect of prescribed safety zones in certain
circumstances where there is a likely threat of terrorist activity.
It is stated that the Minister has never had to make such a
declaration and that this situation is better covered by the
Maritime Transport and Offshore Facilities Security Act
Items 24-37 propose amendments to
sections 20-23, as well as Schedules 1 and
2 of the Offshore Petroleum Act relating to converting the
datum from the Australian Geodetic Datum to the Geocentric Datum of
Australia (as explained earlier).
Item 41 proposes
that when the CEO of the National Offshore Petroleum Safety
Authority delegates functions or powers under section
385 of the Offshore Petroleum Act, the delegate must
comply with the CEO s directions when performing functions, as well
as exercising powers.
This Bill appears to propose largely technical corrections, as
well as a policy change, that do not obviously affect rights and
entitlements of holders of permits.
In certain cases, the proposals would clarify existing
7 March 2008
Bills Digest Service
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