COVID-19 Fact Sheet measures
The Department of Industry, Science, Energy and Resources released a new fact sheet, 'COVID-19 Fact Sheet: Work-Bid Exploration Permits' which is effective from 20 April 2020 (COVID-19 Fact Sheet). The COVID-19 Fact Sheet sets out the following measures to provide flexibility for offshore oil and gas explorers during the COVID-19 pandemic (COVID-19):
- (Suspension and Extension Applications) The Joint Authority regards COVID-19 as a force majeure event in which a titleholder may apply for a suspension, or suspension and extension, in order to meet a work program commitment that has been adversely impacted by COVID-19. The documentary requirements are now simplified with the applicant needing only to show:
- resource constraints (financial and/or physical); and/or
- changes to contractual arrangements with third parties (ie the inability to secure a staffed vessel).
The Joint Authority will generally allow up to a 12 month suspension and extension of the permit title conditions unless exceptional circumstances can be demonstrated by the applicant.
- (Renewal Applications) Additional flexibility will be built into the consideration of renewal applications. Typically, titleholders are expected to drill wells within the first three years of the new permit term, when no well was drilled in the previous term. The Joint Authority has noted that in these challenging times, financial and staffing restraints may limit a titleholder's ability to meet this expectation. Accordingly, the Joint Authority will apply flexibility when considering proposed alternatives and will consider requests on a case by case basis.
- (2019 and 2020 Acreage Releases) The assessment of bids made in the 2019 Acreage Release is proceeding and NOPTA can grant flexibility in the response timeframes for requests for further information. In addition, typically, a company must accept an offer for grant of a petroleum exploration permit within 30 days. An additional period of up to 30 days may be given upon written notice to NOPTA. The preparation for the 2020 Acreage Release is also proceeding.
The COVID-19 Fact Sheet should be read in conjunction with the Offshore Petroleum Exploration Guideline: Work-Bid (July 2019) and the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth). It has also been noted that the COVID-19 Fact Sheet will be revoked in the future. A copy of the fact sheet can be found at this link.
We consider that these temporary measures will be helpful to ensure that exploration activity can still continue during the current crisis and beyond, and will assist titleholders to manage and plan their future activities to address the impacts of COVID-19.