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OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE AMENDMENT (CASH BIDDING) BILL 2013

 

 

 

2013 

 

The Parliament of the 

Commonwealth of Australia 

 

HOUSE OF REPRESENTATIVES 

 

 

 

 

Presented and read a first time 

 

 

 

 

Offshore Petroleum and Greenhouse Gas 

Storage Amendment (Cash Bidding) Bill 

2013 

 

No.      , 2013 

 

(Industry) 

 

 

 

A Bill for an Act to amend the Offshore Petroleum 

and Greenhouse Gas Storage Act 2006, and for 

related purposes 

   

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

i 

 

Contents 

Short title ........................................................................................... 1

 

Commencement ................................................................................. 1

 

Schedule(s) ........................................................................................ 2

 

Schedule 1--Cash-bid petroleum exploration permits

 

3

 

Offshore Petroleum and Greenhouse Gas Storage Act 2006

 

3

 

 

 

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

1 

 

A Bill for an Act to amend the Offshore Petroleum 

and Greenhouse Gas Storage Act 2006, and for 

related purposes 

The Parliament of Australia enacts: 

1  Short title 

 

  This Act may be cited as the Offshore Petroleum and Greenhouse 

Gas Storage Amendment (Cash Bidding) Act 2013

2  Commencement 

 

  This Act commences on the day after this Act receives the Royal 

Assent. 

10 

   

   

 

 

2 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

3  Schedule(s) 

 

  Each Act that is specified in a Schedule to this Act is amended or 

repealed as set out in the applicable items in the Schedule 

concerned, and any other item in a Schedule to this Act has effect 

according to its terms. 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

3 

 

Schedule 1

--

Cash-bid petroleum exploration 

permits 

   

Offshore Petroleum and Greenhouse Gas Storage Act 2006 

1  Section 110 (heading) 

Repeal the heading, substitute: 

110  Cash-bid petroleum exploration permit--application 

2  Paragraph 110(1)(a) 

Repeal the paragraph, substitute: 

 

(a)  invite applications for the grant by the Joint Authority of a 

10 

petroleum exploration permit by way of cash bidding over 

11 

the block or blocks specified in the notice; and 

12 

3  Paragraph 110(3)(c) 

13 

Repeal the paragraph, substitute: 

14 

 

(c)  specify the matters that the Joint Authority will take into 

15 

account in deciding under section 111 whether to invite the 

16 

applicant to make a cash bid. 

17 

4  After subsection 110(3) 

18 

Insert: 

19 

Reserve price 

20 

 

(3A)  Before publishing a notice under subsection (1), the Joint Authority 

21 

must, in writing, determine a reserve price for the grant of the 

22 

permit. 

23 

 

(3B)  A notice under subsection (1) may specify the reserve price so 

24 

determined, but does not need to do so. 

25 

 

(3C)  A determination under subsection (3A) is not a legislative 

26 

instrument. 

27 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

4 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

More than one block 

5  Subsection 110(6) 

Repeal the subsection (not including the notes), substitute: 

 

(6)  An application under this section must be accompanied by details 

of: 

 

(a)  the technical qualifications of the applicant and of the 

applicant's employees; and 

 

(b)  the technical advice available to the applicant; and 

 

(c)  the financial resources available to the applicant. 

6  Sections 111 and 112 

10 

Repeal the sections, substitute: 

11 

111  Cash-bid petroleum exploration permit--cash bids 

12 

Invitations to make a cash bid 

13 

 

(1)  For each application for a cash-bid petroleum exploration permit in 

14 

accordance with a notice under subsection 110(1), the Joint 

15 

Authority must, taking into account the matters specified in the 

16 

notice under paragraph 110(3)(c), by written notice to each 

17 

applicant: 

18 

 

(a)  invite the applicant (an eligible applicant) to make a cash bid 

19 

for the grant of the permit within a period stated in the 

20 

invitation; or 

21 

 

(b)  reject the application. 

22 

How to make a cash bid 

23 

 

(2)  An eligible applicant may make a single cash bid in response to the 

24 

invitation under subsection (1) by written notice to the Joint 

25 

Authority: 

26 

 

(a)  given within the period stated in the invitation; and 

27 

 

(b)  specifying an amount (the cash bid) the applicant would be 

28 

prepared to pay for the grant of a permit; and 

29 

 

(c)  accompanied by a deposit of 10% of the cash bid. 

30 

Note 1: 

A cash bid must be made in an approved manner (see section 255). 

31 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

5 

 

Note 2: 

The Joint Authority can only make an offer of the grant of a permit to 

an applicant at a price that is equal to or higher than the reserve price 

(see sections 112 and 112A). The reserve price may be specified in the 

notice under subsection 110(1), but it need not be (see 

subsection 110(3B)). 

 

(3)  A deposit accompanying a notice under subsection (2) is taken to 

be paid to the Titles Administrator on behalf of the 

Commonwealth. 

Lapsed applications 

 

(4)  If an eligible applicant does not respond to the invitation in 

10 

accordance with subsection (2), the application lapses. 

11 

112  Cash-bid petroleum exploration permit--cash bids less than the 

12 

reserve price 

13 

Scope 

14 

 

(1)  This section applies to an eligible applicant for the grant of a 

15 

cash-bid petroleum exploration whose cash bid under section 111 

16 

is less than the reserve price determined under section 110 for the 

17 

grant of the permit. 

18 

Note: 

The reserve price may be specified in the notice under 

19 

subsection 110(1) in relation to the grant of the permit, but it need not 

20 

be (see subsection 110(3B)). 

21 

Rejection of applications generally 

22 

 

(2)  The Joint Authority must reject the application by written notice to 

23 

the applicant unless: 

24 

 

(a)  the reserve price is not specified in the notice under 

25 

subsection 110(1); and 

26 

 

(b)  the applicant's cash bid is: 

27 

 

(i)  the only cash bid, or the highest cash bid, for the grant 

28 

of the permit that is less than the reserve price; or 

29 

 

(ii)  equal to one or more other cash bids which are the only 

30 

cash bids, or the highest cash bids, for the grant of the 

31 

permit that are less than the reserve price. 

32 

Note: 

Applications to which paragraphs (a) and (b) apply may be rejected 

33 

under subsection (3) of this section, or following the grant of the 

34 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

6 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

permit to another applicant under section 113. They may also lapse 

under section 260A if the applicant fails to respond to an offer made 

under subsection (3) of this section. 

Offer of grant of permit at reserve price 

 

(3)  The following table applies if: 

 

(a)  the reserve price is not specified in the notice under 

subsection 110(1); and 

 

(b)  the only cash bids for the grant of the permit made under 

section 111 are less than the reserve price. 

 

10 

Offer of grant of permit at reserve price 

Item 

If ...  

then ...  

the applicant's cash bid is: 

(a) the only cash bid; or 

(b) the single highest cash bid 

the Joint Authority must: 

(a) give a written notice (called an 

offer document) to the applicant 

telling the applicant that the Joint 

Authority is prepared to grant the 

permit to the applicant for a 

specified permit price that is 

equal to the reserve price; or 

(b) reject the application by written 

notice to the applicant. 

2 or more applicants (tied 

applicants) make cash bids that are: 

(a) equal to each other's cash bids; 

and 

(b) either the only cash bids, or 

higher than all the other cash 

bids 

the Joint Authority must: 

(a) give an offer document to the 

tied applicant whose cash bid 

was received earliest telling that 

tied applicant that the Joint 

Authority is prepared to grant the 

permit to the tied applicant for a 

specified permit price that is 

equal to the reserve price; or 

(b) reject the application, and those 

of all the other tied applicants, by 

written notice to each tied 

applicant. 

Note 1: 

Section 259 sets out additional requirements for offer documents (for 

11 

example, a requirement that an offer document must contain a 

12 

summary of conditions). 

13 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

7 

 

Note 2: 

If an applicant breaches a requirement under section 258 to provide 

further information, the Joint Authority may refuse to give the 

applicant an offer document. 

 

(4)  In considering whether to give an offer document to an applicant 

under subsection (3), the Joint Authority must have regard to the 

difference between the applicant's cash bid and the reserve price. 

Refund of deposit to rejected applicants 

 

(5)  If the Joint Authority rejects an application under this section, the 

Titles Administrator, on behalf of the Commonwealth, must refund 

to the applicant an amount equal to the applicant's deposit under 

10 

section 111. 

11 

112A  Cash-bid petroleum exploration permit--highest cash bids at 

12 

or over the reserve price 

13 

Scope 

14 

 

(1)  This section applies in relation to a cash bid (a qualifying cash bid

15 

under section 111 by an eligible applicant for the grant of a 

16 

cash-bid petroleum exploration permit that is equal to or higher 

17 

than the reserve price determined under section 110. 

18 

Issue of offer documents etc. 

19 

 

(2)  The following table sets out the circumstances in which the Joint 

20 

Authority must give an offer document, or an invitation to make a 

21 

tie-breaking cash bid, to an eligible applicant who makes a 

22 

qualifying cash bid. 

23 

 

24 

Issue of offer documents or tie-breaking invitations 

Item 

If ...  

the Joint Authority must ...  

the applicant's cash bid is: 

(a) the only qualifying cash bid; or 

(b) the single highest qualifying cash 

bid 

give a written notice (called an offer 

document) to the applicant telling 

the applicant that the Joint Authority 

is prepared to grant the permit to the 

applicant. 

2 or more eligible applicants (tied 

applicants) make qualifying cash 

invite each tied applicant, by written 

notice (a tie-breaking invitation), to 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

8 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

Issue of offer documents or tie-breaking invitations 

Item 

If ...  

the Joint Authority must ...  

bids that are: 

(a) equal to each other's cash bids; 

and 

(b) either the only qualifying cash 

bids, or higher than all the other 

qualifying cash bids 

make a higher cash bid within a 

period stated in the tie-breaking 

invitation. 

Note 1: 

Section 259 sets out additional requirements for offer documents (for 

example, a requirement that an offer document must contain a 

summary of conditions). 

Note 2: 

If an applicant breaches a requirement under section 258 to provide 

further information, the Joint Authority may refuse to give the 

applicant an offer document. 

112B  Cash-bid petroleum exploration permit--tie-breaking 

invitation 

Scope 

 

(1)  This section applies if the Joint Authority, under section 112A, 

10 

makes a tie-breaking invitation to 2 or more tied applicants for the 

11 

grant of a cash-bid petroleum exploration permit. 

12 

Responses to the tie-breaking invitation 

13 

 

(2)  Before the end of the period stated in the tie-breaking invitation, a 

14 

tied applicant may, by written notice to the Joint Authority, make a 

15 

further cash bid (a tie-breaking cash bid) higher than the 

16 

applicant's previous cash bid. 

17 

Note: 

A tie-breaking cash bid must be made in an approved manner (see 

18 

section 255). 

19 

 

(3)  The following table sets out the process for dealing with responses 

20 

(if any) to the tie-breaking invitation. 

21 

 

22 

Responses to the tie-breaking invitation 

Item 

If ...  

then ...  

a tied applicant makes a tie-breaking 

the Joint Authority must give a 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

9 

 

Responses to the tie-breaking invitation 

Item 

If ...  

then ...  

cash bid within the period stated in 

the tie-breaking invitation that is: 

(a) the only tie-breaking cash bid; or 

(b) the single highest tie-breaking 

cash bid  

written notice (called an offer 

document) to that tied applicant 

telling the applicant that the Joint 

Authority is prepared to grant the 

permit to the applicant. 

there are 2 or more tie-breaking cash 

bids by applicants (further-tie 

applicants) made within the period 

stated in the tie-breaking invitation 

that are: 

(a) equal to each other; and 

(b) either the only tie-breaking cash 

bids, or higher than all the other 

tie-breaking cash bids 

the Joint Authority must give an 

offer document to the further-tie 

applicant whose tie-breaking cash 

bid was received earliest. 

none of the tied applicants makes a 

tie-breaking cash bid within the 

period stated in the tie-breaking 

invitation 

the Joint Authority must give an 

offer document to the tied applicant 

whose cash bid under section 111 

was received earliest. 

Note 1: 

Section 259 sets out additional requirements for offer documents (for 

example, a requirement that an offer document must contain a 

summary of conditions). 

Note 2: 

If an applicant breaches a requirement under section 258 to provide 

further information, the Joint Authority may refuse to give the 

applicant an offer document. 

7  Section 113 (heading) 

Repeal the heading, substitute: 

113  Cash-bid petroleum exploration permit--grant 

8  Paragraph 113(1)(a) 

10 

Omit "111 or 112", substitute "112, 112A or 112B". 

11 

9  Paragraph 113(1)(c) 

12 

Repeal the paragraph, substitute: 

13 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

10 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

 

(c)  the applicant has, within the applicable period under 

section 260, paid to the Titles Administrator, on behalf of the 

Commonwealth, the amount specified in the offer document 

as the balance of the permit price; 

10  Subsection 113(2) 

Repeal the subsection, substitute: 

 

(2)  If the Joint Authority grants a petroleum exploration permit to an 

applicant under subsection (1): 

 

(a)  the Joint Authority must reject all other applications for the 

permit (other than those that have already been rejected, or 

10 

have lapsed), by written notice to each of those applicants 

11 

(each rejected applicant); and 

12 

 

(b)  the Titles Administrator, on behalf of the Commonwealth, 

13 

must refund to each rejected applicant an amount equal to the 

14 

rejected applicant's deposit under section 111. 

15 

Note 1: 

An application may have already been rejected under section 111 (if 

16 

the applicant is not invited to make a cash bid) or 112 (if the 

17 

applicant's cash bid is less than the reserve price). 

18 

Note 2: 

An application may have already lapsed under section 111 (if the 

19 

applicant fails to respond to a cash-bid invitation) or 260A (if the 

20 

applicant fails to respond to an offer). 

21 

11  Section 255 (heading) 

22 

Repeal the heading, substitute: 

23 

255  Application and cash bid to be made in an approved manner 

24 

12  After subsection 255(1) 

25 

Insert: 

26 

 

(1A)  This section also applies to a cash bid, or a tie-breaking cash bid, 

27 

made under section 111 or 112B for the grant of a petroleum 

28 

exploration permit. 

29 

13  Subsection 255(2) 

30 

After "application", insert ", cash bid or tie-breaking cash bid". 

31 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

11 

 

14  Paragraphs 259(3)(a) and (b) 

Repeal the paragraphs, substitute: 

 

(a)  specify, as the permit price: 

 

(i)  the amount of the cash bid, or tie-breaking cash bid, in 

relation to which the offer document is given; or 

 

(ii)  in the case of an offer document given under 

section 112--the amount of the reserve price 

determined under section 110 for the grant of the 

permit; and 

 

(b)  specify, as the balance of the permit price, an amount equal 

10 

to the difference between the permit price and the deposit 

11 

given by the applicant under section 111; and 

12 

 

(c)  contain a statement to the effect that if the applicant does not 

13 

pay the balance of the permit price to the Commonwealth 

14 

within the period allowed for making a request under 

15 

section 260: 

16 

 

(i)  the application will lapse; and 

17 

 

(ii)  except in the case of an offer document given under 

18 

section 112--the applicant's deposit will be forfeited to 

19 

the Titles Administrator on behalf of the 

20 

Commonwealth. 

21 

Note: 

An offer document may be given under section 112 for the grant of a 

22 

permit at the reserve price to an applicant whose cash bid is less than 

23 

the reserve price. 

24 

15  Subsection 260(1) (table item 2) 

25 

Omit "30 days", substitute "14 days". 

26 

16  Subsection 260(4) 

27 

After "item of the table", insert ", except item 2,". 

28 

17  At the end of subsection 260(4) 

29 

Add: 

30 

Note: 

For the failure to request the grant of cash-bid petroleum exploration 

31 

permits under item 2 of the table, or the failure to pay for such 

32 

permits, see section 260A. 

33 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

12 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

18  After section 260 

Insert: 

260A  Cash-bid petroleum exploration permits--failure to respond 

to offer 

Scope 

 

(1)  This section applies if: 

 

(a)  an offer document has been given to an applicant (the 

non-responding applicant) for the grant of a cash-bid 

petroleum exploration permit who has made a cash bid, or a 

tie-breaking cash bid, for the grant of the permit; and 

10 

 

(b)  at the end of the applicable period under section 260, the 

11 

non-responding applicant: 

12 

 

(i)  has not made a request under that section; or 

13 

 

(ii)  has not paid the amount specified in the offer document 

14 

as the balance of the permit price that the applicant must 

15 

pay for the permit. 

16 

Lapse of application and forfeit of deposit 

17 

 

(2)  At the end of the applicable period: 

18 

 

(a)  the application lapses; and 

19 

 

(b)  unless the offer document was given under section 112--an 

20 

amount equal to the non-responding applicant's deposit under 

21 

section 111 is forfeited to the Commonwealth; and 

22 

 

(c)  if the offer document was given under section 112--the 

23 

Titles Administrator, on behalf of the Commonwealth, must 

24 

refund to the non-responding applicant an amount equal to 

25 

that applicant's deposit under section 111. 

26 

Further offers 

27 

 

(3)  The following table requires or allows an offer document to be 

28 

given to an applicant other than the non-responding applicant by 

29 

applying sections 112, 112A and 112B as if applicants whose 

30 

applications have lapsed or been rejected (lapsed or rejected 

31 

applicants), including the non-responding applicant, had not made 

32 

cash bids. 

33 

Cash-bid petroleum exploration permits  Schedule 1 

   

 

 

No.      , 2013 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

13 

 

 

Further offers 

Item 

If  ...  

then, at the end of the applicable 

period  ...  

there are any cash bids for the 

permit remaining at the end of the 

applicable period (apart from those 

made by lapsed or rejected 

applicants) that are equal to or 

higher than the reserve price 

determined under section 110 

sections 112A and 112B apply as if 

the lapsed or rejected applicants had 

not made cash bids under 

section 111. 

(a) the reserve price determined 

under section 110 for the grant of 

the permit is not specified in the 

notice under subsection 110(1); 

and 

(b) the only remaining cash bids 

under section 111 (apart from 

those made by lapsed or rejected 

applicants) are less than the 

reserve price 

section 112 applies as if the lapsed 

or rejected applicants had not made 

cash bids under section 111. 

Note: 

Sections 112, 112A and 112B set out the circumstances in which the 

Joint Authority may, or must, give an offer document to an applicant 

for a cash-bid petroleum exploration permit. 

19  Section 261 (heading) 

Repeal the heading, substitute: 

261  Special petroleum exploration permits and s 181 petroleum 

production licences--failure to pay 

20  Subsection 261(1) 

Repeal the subsection. 

10 

21  Subsection 261(2) (heading) 

11 

Repeal the heading. 

12 

22  Subsection 261(2) 

13 

Omit "(2) If:", substitute "If:". 

14 

Schedule 1  Cash-bid petroleum exploration permits 

   

 

 

14 

Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash 

Bidding) Bill 2013 

No.      , 2013 

 

23  Section 695K (heading) 

Repeal the heading, substitute: 

695K  Purposes of the Account and transfers to general CRF 

24  Section 695K 

Before "The purposes", insert "(1)". 

25  At the end of section 695K 

Add: 

 

(2)  The following amounts must be debited from the Account: 

 

(a)  if a cash-bid petroleum exploration permit is granted to an 

applicant in accordance with section 113--an amount equal 

10 

to the amount specified as the permit price in the offer 

11 

document given to the applicant; 

12 

 

(b)  if a deposit paid by an applicant for the grant of a cash-bid 

13 

petroleum exploration permit is forfeited to the 

14 

Commonwealth under subsection 260A(2)--an amount equal 

15 

to the amount of the deposit. 

16 

Note 1: 

Amounts equal to the amounts mentioned in this subsection are paid 

17 

into the Special Account under section 695J. The effect of this 

18 

subsection is to transfer those amounts from the Special Account to 

19 

the general Consolidated Revenue Fund. 

20 

Note 2: 

Subsection 260A(2) provides for a deposit made by an applicant for 

21 

the grant of a permit to be forfeited to the Commonwealth if the 

22 

applicant fails to respond to an offer for the grant of the permit. 

23 

26  After paragraph 695M(1)(a) 

24 

Insert: 

25 

 

(aa)  a cash-bid petroleum exploration permit; and 

26 

 


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