The prime title for petroleum, geothermal energy and greenhouse gas storage exploration under State legislation is the Exploration Permit. Permits are available through a periodic release of vacant acreage in a work program-based competitive bid process or via applications for a Special Prospecting Authority with Acreage Option.
Exploration Permits are awarded to bidding applicants whose work program undertakes the widest assessment of an area’s potential. Other focus areas include sound resource management, safety and environmental principles, and the ability to satisfy criteria for assessment guidelines.
All bids are regarded as strictly confidential. However, following acceptance of an exploration permit offer (Petroleum and Greenhouse Gas Storage (Submerged Lands) Act 1982), or on entering the native title future act process as the applicant deemed most suitable for the award (Petroleum, Geothermal Energy and Greenhouse Gas Storage Act 1967), certain information (other than details of applicants’ financial and technical abilities and interpretive data) may be made publicly available.
Permits are granted based on a guarantee to complete the first two years of work without variation. This is also known as the dry hole system and means the title holder is required to fulfil the nominated commitment for those initial years, regardless of the circumstances, excepting force majeure. Force majeure refers to any uncontrollable event that interrupts the expected course of events.
The initial term of a petroleum or geothermal energy Exploration Permit is six years, which can only be renewed for two further periods of five years, with 50 per cent relinquishment of the area at the end of each term (for a total of 16 years). For greenhouse gas Exploration Permits, the initial term is also six years; however, greenhouse gas Exploration Permits can only be renewed once, with 50 per cent relinquishment of the area at the end of the first term (for a total of 11 years).
Permits are granted subject to specific minimum work commitments that must be met each year or earlier. Permits in the State area must complete the first two years of the work program before they can be surrendered.
Please note: only individuals or bodies corporate can be title holders. Titles cannot be granted to a joint venture name; rather, each joint venture participant will be listed as a joint title holder. Where Exploration Permits are made by a consortium, it is usually a requirement to provide a positive indication, such as heads of agreement, that a joint operating agreement will be provided.
Declaration of Location or Declaration of Storage Formation
On discovery of a resource, a permit holder (permittee) must notify and provide details to the department giving details of the discovery. Hydrocarbons or geothermal energy must be recovered to surface before a location can be declared. Before applying for a Retention Lease or Production Licence, the permittee must nominate the block or blocks that cover the discovery area of the discovery.
A greenhouse gas title holder, or a petroleum or geothermal licensee or lessee may apply for a declaration of storage formation. A declared storage formation is a pre-requisite to applying for a greenhouse gas injection licence or greenhouse gas retention lease.
Where a location is declared over a discovery, the blocks remain under the exploration title, and the permittee may undertake further exploration and/or appraisal activities within the location to determine more accurately the extent of the discovery.
The application period for a petroleum or geothermal energy lease or licence is two years following the declaration of location, unless the Minister approves a further period of two years for an application to be lodged. The application period for a greenhouse gas lease or licence is 12 months after the declaration of a storage formation, unless the Minister approves a further period of six months for an application to be lodged. The application period cannot be extended a second time.
More information on Exploration Permits can be found in the following publications:
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