The prime title for petroleum and geothermal energy 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 (Submerged Lands) Act 1982), or on entering the native title future act process as the applicant deemed most suitable for the award (Petroleum and Geothermal Energy Resources 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 permit 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 an 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).
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: Petroleum legislation only recognises individuals or corporate bodies. Permits or other titles cannot be granted to a Joint Venture name. Where Petroleum 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
On discovery of petroleum, a permit holder (permittee) must notify and provide details to the Department of Energy, Mines, Industry Regulation and Safety (the Department) giving details of the discovery. Hydrocarbons 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.
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 lease or licence is two years following the declaration of location, unless the Minister approves an extension of two years for an application to be lodged. The application period cannot be extended a further time.
More information on Exploration Permits can be found in the following publications:
