OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE (REGULATORY LEVIES) AMENDMENT REGULATIONS 2011 (NO. 1) (SLI NO 106 OF 2011) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE (REGULATORY LEVIES) AMENDMENT REGULATIONS 2011 (NO. 1) (SLI NO 106 OF 2011)

EXPLANATORY STATEMENT

Select Legislative Instrument 2011 No. 106

Subject Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003

Offshore Petroleum and Greenhouse Gas Storage Act 2006

Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Regulations 2011 (No. 1)

The Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Act 2011 (Regulatory Levies Amendment Act) and the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies (Consequential Amendments) Act 2011 (Consequential Amendments Act) received Royal Assent on 25 May 2011. Schedule 1 to the Regulatory Levies Amendment Act commenced by Proclamation on 17 June 2011. Schedule 1 to the Consequential Amendments Act commenced at the same time as Schedule 1 to the Regulatory Levies Amendment Act.

Schedule 1 to the Regulatory Levies Amendment Act amended the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (re-named the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 - hereafter referred to as the Regulatory Levies Act) to impose well-related levies on offshore petroleum titleholders to recover the costs of the National Offshore Petroleum Safety Authority (NOPSA) in undertaking its regulatory functions in relation to structural integrity and safety of wells and well-related equipment.

Section 11 of the Regulatory Levies Act provides that the Governor-General may make regulations for the purposes of sections 7, 8, 9, 10, 10A, 10B, 10C and 10D of that Act. Sections 9 and 10 of the Regulatory Levies Act impose well investigation levies in relation to Commonwealth and State/Territory petroleum titles respectively. Sections 10A and 10B impose annual well levies in relation to Commonwealth and State/Territory petroleum titles, and sections 10C and 10D impose well activity levies in relation to Commonwealth and State/Territory petroleum titles.

In addition, section 781 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) provides that the Governor-General may make regulations prescribing matters required or permitted by this Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the OPGGS Act. Schedule 1 to the Consequential Amendments Act, among other things, inserted new sections 688, 688A and 688B into the OPGGS Act. Sections 688, 688A and 688B provide, among other things, that well investigation levy, annual well levy and well activity levy respectively, imposed by the Regulatory Levies Act, become due and payable at the time specified in, or worked out in accordance with, the regulations.

The Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Regulations 2011 (No. 1) (the Amendment Regulations) amend the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Regulations 2004 (the Principal Regulations) to set out the matters permitted or necessary to be prescribed to enable full and effective collection of well-related levies from offshore petroleum titleholders. The matters dealt with in the Amendment Regulations include the amounts of levy imposed and when levies become due and payable.

The Amendment Regulations also amend the Principal Regulations to change the name of those Regulations to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Regulations 2004, to reflect the expansion of the content of the Regulations to include levies relating to wells. In addition, references in the Principal Regulations to the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 are amended to refer to the new short title of that Act (i.e. the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003).

Details on the Amendment Regulations are included in the Attachment.

The Amendment Regulations ensure that NOPSA can fully and effectively collect well-related levies from the time that levies commenced to be imposed by the Regulatory Levies Act. The purpose of the well levies is to ensure that NOPSA, which is funded on a full cost-recovery basis with levies raised by the offshore petroleum industry, can fully recover its costs associated with undertaking augmented well integrity and well safety functions. Public consultation in relation to the transfer of integrity of wells as a function to NOPSA occurred in conjunction with amendments to the OPGGS Act in 2010 through the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Act 2010.

In addition, NOPSA consulted with industry in relation to the development of the Cost Recovery Impact Statement (CRIS) for the well-related levies, which details the purpose and background to the imposition of the levies, levy design and implementation, on-going review of the levies, and the proposed amounts of the levies. NOPSA met with titleholders and representatives of the Australian Petroleum Production and Exploration Association, the major oil and gas representative body in Australia, on 25 February 2011, to discuss the cost-recovery arrangements, and also provided a discussion paper on 2 March 2011. This paper was also made available on NOPSA's website. Titleholders were asked for written submissions regarding the proposal so that an evaluation could be made prior to finalising the CRIS.

The Amendment Regulations commence on the commencement of Schedule 1 to the Regulatory Levies Amendment Act (i.e. 17 June 2011).

The Amendment Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT

Details of the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Regulations 2011 (No. 1)

Regulation 1 - Name of Regulations

Regulation 1 provides for the full title of the Amendment Regulations to be the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Regulations 2011 (No. 1).

Regulation 2 - Commencement

Regulation 2 provides for the Amendment Regulations to commence on the commencement of Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Act 2011. Schedule 1 to that Act commenced by Proclamation on 17 June 2011.

Regulation 3 - Amendment of Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Regulations 2004

Regulation 3 provides that Schedule 1 to the Amendment Regulations amends the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Regulations 2004 (the Principal Regulations).

Schedule 1 - Amendments

Item 1 - Regulation 1

This item changes the name of the Principal Regulations to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Regulations 2004 (the Regulatory Levies Regulations). The change in name reflects the expansion of the content of the Principal Regulations to include regulations concerning well-related levies.

Item 2 - Regulation 3, definition of OPGGS(SL) Act

This item removes the definition of "OPGGS(SL) Act", including the reference to the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (Safety Levies Act). This reflects the name change to the Safety Levies Act on the commencement of Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Act 2011 - see item 3.

Item 3 - Regulation 3, after definition of quarter

This item defines "Regulatory Levies Act" as the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003, which is the new name for the Safety Levies Act following the commencement of Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Act 2011 on 17 June 2011.

Item 4 - After Part 5

This item inserts new Parts 6, 7, 8, 9, 10 and 11, which include provisions to ensure the full and effective collection of well investigation levies, annual well levies and well activity levies from Commonwealth and State/Territory petroleum titleholders. Further detail about the provisions of each Part is provided below.

Part 6 - Well investigation levy - Commonwealth waters

Part 6 relates to well investigation levy imposed on registered holders of petroleum titles in Commonwealth waters by section 9 of the Regulatory Levies Act.

Division 1 of Part 6 - Preliminary - (regulation 36) defines particular terms that are used in Part 6.

Division 2 of Part 6 - Working out well investigation levy - (regulations 37 to 39) provides for working out the amount of well investigation levy payable.

Regulation 37 - Determination of no obligation to pay amount of well investigation levy

The well investigation levy is a means of avoiding subsidisation of titleholders with poor health and safety performance by those titleholders who have a good performance. The Regulatory Levies Act imposes the levy on a petroleum titleholder whenever the amount of the costs and expenses reasonably incurred by the National Offshore Petroleum Safety Authority (NOPSA) in relation to the conduct of an inspection concerning a contravention or possible contravention of the titleholder's occupational health and safety (OHS) duty of care in relation to wells and well-related equipment exceeds $30,000.

However, there may be circumstances where it would not be appropriate to impose a levy on a titleholder in relation to an inspection. For example, it might be found that the root cause of a breach of the OHS duty of care by a titleholder was common to other well operations and other titleholders, meaning that the industry in general will benefit from the findings of the inspection. To allow for such cases, this regulation provides a mechanism whereby NOPSA can determine that it is inappropriate for the titleholder to pay the well investigation levy, whereupon the amount of the levy is set to zero.

Subregulation 37(1) establishes that NOPSA may determine, in writing, that it is inappropriate for a petroleum titleholder to pay well investigation levy imposed on an inspection. Subregulation 37(2) establishes that such a determination may be made at any time after well investigation levy is first imposed (i.e. ay any time after the first time that costs and expenses incurred in relation to the conduct of the inspection exceed $30,000).

Subregulation 37(3) provides that a titleholder and NOPSA may agree at any time to the selection and appointment of an independent expert to investigate and report on whether NOPSA should make a determination under subregulation 37(1). Subregulation 37(4) provides that NOPSA must not unreasonably withhold agreement to the selection and appointment of a person as the independent expert. These provisions ensure that the decision by NOPSA whether to make a determination under subregulation 37(1) is reviewable by a person who has the necessary expert knowledge of the technology, design and operation of offshore petroleum wells and a familiarity with industry safety practices.

Subregulation 37(5) provides that the titleholder bears the costs incurred for the services of the independent expert.

Subregulation 37(6) provides that NOPSA must consider the independent expert's report and that it may then make a determination under subregulation 37(1).

Subregulation 37(7) establishes that the Minister may give directions in writing to NOPSA with respect to subregulations (3) and (6), whilst subregulation 37(8) establishes that NOPSA must comply with any such directions.

Subregulation 37(9) establishes that, if NOPSA makes a determination under subregulation 37(1), it must give a copy of the determination to the titleholder as soon as practicable and the determination takes effect on the day on which the levy was first imposed on the inspection (i.e. the first time that costs and expenses incurred in relation to the conduct of the inspection exceeded $30,000). This retrospective operation of the determination means that the levy amount will become zero from the time when the levy was imposed. Any levy already paid by the titleholder will be refundable.

Subregulation 37(9) also makes it clear that a determination under subregulation 37(1) covers every levy period that occurs during the inspection. Subsection 9(1) of the Regulatory Levies Act provides for three month levy periods, including the first levy period (the period of 3 months beginning the first time when the amount of the costs and expenses incurred by NOPSA in relation to the conduct of the inspection exceed $30,000), and each successive three month period during which the inspection continues to be conducted. Therefore, for example, a determination of no obligation to pay cannot be applied to the first 3 month period after the costs and expenses exceeded $30,000, but not to a later 3 month period.

Regulation 38 - Amount of well investigation levy

Subregulation 38(1) establishes the amount of the levy. Item 1 of the table provides that, if NOPSA has not made any determination under subregulation 37(1) in relation to the inspection, the amount of the levy for each three month levy period is the amount of the costs and expenses reasonably incurred by NOPSA in relation to the conduct of the inspection during that levy period.

The first levy period is the period of three months that commences the first time when the amount of the costs and expenses incurred by NOPSA in relation to the conduct of the inspection exceed $30,000. For example, an OHS inspector begins to conduct an inspection on 1 May, and at 28 August the total costs and expenses incurred to date are $29,000. On 3 September, NOPSA incurs further costs of $2,000 in relation to the conduct of the inspection, bringing the total costs and expenses to date to $31,000. Therefore, as at 3 September, the total amount of the costs and expenses incurred by NOPSA now exceed $30,000, and as soon as the amount exceeded the $30,000 threshold levy is imposed and the levy period commences (i.e. the threshold has been exceeded by $1,000, and this amount will contribute to the total levy imposed for the levy period). The first levy period ends on 3 December (three months after the commencement of the levy period). By the end of 3 December, NOPSA has incurred additional costs and expenses of $32,000 (so that the total costs and expenses for the inspection to date are $63,000). The amount of the costs and expenses incurred in the first levy period, and therefore the amount of levy imposed for that levy period, is $33,000 (including the first $1,000 incurred when the $30,000 threshold was first exceeded, plus the additional costs and expenses of $32,000 incurred during the remainder of the three month levy period).

In the next 3 month levy period, the costs and expenses incurred by NOPSA in relation to the conduct of the inspection are $11,000 (so that the total costs and expenses for the inspection to date are $73,000). The amount of levy for this levy period is therefore $11,000.

Item 2 of the table in subregulation 38(1) provides that, if NOPSA has made a determination under subregulation 37(1), the amount of the levy is zero.

Subregulation 38(2) establishes that, for the purposes of the well investigation levy, an inspection is taken to continue to be conducted until either: (a) the day when a brief of evidence in relation to the inspection and a proposed prosecution of a person in connection with a contravention or possible contravention of the titleholder OHS duty of care in subclause 13A(1) or (2) of the OPGGS Act is referred by NOPSA to the Commonwealth Director of Public Prosecutions (DPP); or (b) the day NOPSA informs the titleholder in writing that the inspection is complete. The inspection may continue beyond this point, but the well investigation levy ceases to accumulate.

If NOPSA has submitted a brief of evidence to the DPP, subregulation 38(3) requires NOPSA to inform the titleholder in writing as soon as practicable after the brief has been referred.

Regulation 39 - Advice of independent expert about costs and expenses

This regulation provides for an independent expert to be appointed to review the reasonableness of the costs claimed to have been incurred by NOPSA for the purposes of carrying out an inspection. This ensures that there is transparency and rigour in the costing of NOPSA's performance of the inspection and therefore in the working out of the amount of the levy. It also ensures that the review is carried out by a person who has specialist expertise in the technology involved and who is familiar with proper investigatory processes.

Subregulation 39(1) provides that a titleholder and NOPSA may agree at any time to the selection and appointment of an independent expert to investigate and report on the reasonableness of the costs and expenses claimed to have been incurred by NOPSA in relation to the inspection. Subregulation 39(2) determines that NOPSA cannot unreasonably withhold agreement to the selection or appointment.

Subregulation 39(3) provides that the titleholder bears the costs incurred in relation to the services of the independent expert.

Subregulation 39(4) provides that, when NOPSA receives the report of the independent expert, it must give a copy to the titleholder as soon as practicable, and must consider the report. If NOPSA has previously notified the titleholder of the amount of the levy that is payable for a levy period under regulation 38, it may give a revised notice of the levy amount.

NOPSA is not bound by any recommendation in the independent expert's report, but the regulation provides for accountability of NOPSA in making its decision whether to accept the recommendation. Subregulation 39(5) establishes that the Minister may give directions in writing to NOPSA with respect to the exercise of its powers under subregulations (1) and (4), whilst subregulation 39(6) establishes that NOPSA must comply with any such directions.

Division 3 of Part 6 - Paying well investigation levy - (regulations 40 and 41) provides for when well investigation levy is due and payable, and record-keeping requirements for NOPSA.

Regulation 40 - When well investigation levy is due and payable

Subregulation 40(1) provides that, for subsection 688(1) of the OPGGS Act, this regulation sets out when the well investigation levy is due and payable.

Subregulation 40(2) establishes that, if an inspection is taken to be complete before the end of a three month levy period (due to referral of a brief of evidence by NOPSA to the DPP or written notice given to the titleholder - see subregulation 38(2)), the well investigation levy is payable on the day that the inspection is taken to be complete. However, if neither of these events occurs before the end of the levy period, the levy is payable at the end of the levy period.

Subregulation 40(3) requires NOPSA to notify the titleholder that payment is due within 14 days after the amount becomes payable.

Subregulation 40(4) clarifies that a notification by NOPSA is valid even if it is late.

Subregulation 40(5) establishes that the levy is due 30 days after notification.

Regulation 41 - Safety Authority must keep records

This regulation requires NOPSA to make records of the costs and expenses that are to be included in the cost of an inspection, both prior to reaching the $30,000 threshold and subsequently for each three month levy period. The records must be kept for 7 years, and must be made available to the titleholder to whom they relate (either available for inspection, or provided as copies on request).

Part 7 - Well investigation levy - designated coastal waters

Part 7 makes provision for the same matters as Part 6, but in relation to well investigation levy imposed on registered holders of State/Territory petroleum titles in designated coastal waters by section 10 of the Regulatory Levies Act.

Division 1 of Part 7 - Preliminary - defines particular terms that are used in Part 7.

Division 2 of Part 7 - Working out well investigation levy - (regulations 43 to 45) provides for working out the amount of well investigation levy.

Regulation 43 - Determination of no obligation to pay amount of well investigation levy

Regulation 43 makes provision for the same matters as regulation 37, but in relation to well investigation levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 37.

Regulation 44 - Amount of well investigation levy

Regulation 44 makes provision for the same matters as regulation 38, but in relation to well investigation levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 38.

For subregulation 44(2), for the purposes of the well investigation levy, the inspection is taken to continue to be conducted until either: (a) the day when a brief of evidence in relation to the inspection and a proposed prosecution of a person, in connection with a contravention or possible contravention of a provision in State or Territory legislation that substantially corresponds to the titleholder OHS duty of care in subclause 13A(1) or (2) of the OPGGS Act, is referred by NOPSA to an agency responsible for prosecutions in the relevant jurisdiction; or (b) the day NOPSA informs the State/Territory petroleum titleholder in writing that the inspection is complete. The inspection may continue beyond this point, but the well investigation levy ceases to accumulate.

Regulation 45 - Advice of independent expert about costs and expenses

Regulation 45 makes provision for the same matters as regulation 39, but in relation to well investigation levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 39.

Division 3 of Part 7 - Paying well investigation levy - (regulations 46 and 47) provides for when well investigation levy is due and payable, and record-keeping requirements for NOPSA.

Regulation 46 - When well investigation levy is due and payable

Regulation 46 makes provision for the same matters as regulation 40, but in relation to well investigation levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 40.

Regulation 47 - Safety Authority must keep records

Regulation 47 makes provision for the same matters as regulation 41, but in relation to well investigation levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 41.

Part 8 - Annual well levy - Commonwealth petroleum titles

Part 8 (regulations 48 to 50) relates to annual well levy imposed on registered holders of petroleum titles in Commonwealth waters by section 10A of the Regulatory Levies Act.

Regulation 48 - Definitions for Part 8

Regulation 48 defines particular terms that are used in Part 8.

Regulation 49 - Amount of annual well levy

Subregulation 49(1) provides for the amount of annual well levy for a year imposed on the eligible wells in a title area.

As defined by section 10A of the Regulatory Levies Act, an "eligible well" in relation to a petroleum title for a year includes either or both of the following:

* A non-abandoned well which is situated wholly or partly in a title area at the end of the preceding calendar year, and

* A well that began to be drilled in a title area during the preceding calendar year and was also abandoned during that year.

The amount of annual well levy imposed is equal to the number of eligible wells in relation to a petroleum title for a year, multiplied by $2,600.

Therefore as an example, if, on 31 December 2012, there are three non-abandoned wells in Title Area A, and also during 2012 a fourth well was commenced to be drilled in Title Area A but was abandoned during the same year, an annual well levy would apply to Title Area A on 1 January 2013 in respect of four wells: the three non-abandoned wells plus the well that was drilled and abandoned. The amount of levy imposed on the titleholder would be $10,400 (i.e. the number of wells multiplied by $2,600).

Subregulation 49(2) provides for the amount of annual well levy for a transitional year imposed on the eligible wells in a title area.

As defined by subsection 10A(9) of the Regulatory Levies Act, the transitional year begins at the commencement of that subsection and ends at the end of the 31 December next following that commencement. Therefore, if subsection 10A(9) of the Regulatory Levies Act commences on 17 June 2011, the transitional year will commence on that date, and end at the end of 31 December 2011.

The amount of annual well levy imposed for the transitional year would be worked out by first multiplying the number of eligible wells in relation to a petroleum title for the transitional year by $2,600. This number is then multiplied by the number obtained when the number of days in the transitional year is divided by 365.

Therefore, as an example, assume that subsection 10A(9) of the Regulatory Levies Act commences on 17 June 2011. The number of days in the transitional year is 198. If, on 31 December 2010, there are three non-abandoned wells in Title Area A, and also during 2010 a fourth well was commenced to be drilled in Title Area A but was abandoned during the same year, an annual well levy would apply to Title Area A on 17 June 2011 in respect of four wells: the three non-abandoned wells plus the well that was drilled and abandoned. The amount of levy imposed on the titleholder would be $5,641.64 (i.e. the amount obtained by first multiplying the number of wells by $2,600, multiplied by the number obtained by dividing 198 by 365).

Regulation 50 - When annual well levy is due and payable

This regulation provides for when annual well levy is due and payable. Annual well levy is payable on 1 January of any year in respect of which annual well levy is imposed (with the exception of the transitional year - see below). Therefore, if there are any eligible wells in relation to a petroleum title for a year, annual well levy is payable on 1 January of that year. See discussion of "eligible well" under regulation 49. In the example given above under regulation 49, the $10,400 levy would be payable on 1 January 2013.

For the transitional year, annual well levy is payable on the day on which section 10A of the Regulatory Levies Act commences (i.e. the first day from which annual well levies are imposed on petroleum titleholders). In the example for the transitional year given above under regulation 49, the $5,641.64 levy would be payable on 17 June 2011.

Annual well levy is due 30 days after the levy becomes payable.

Part 9 - Annual well levy - State/Territory petroleum titles

Part 9 (regulations 51 to 53) makes provision for the same matters as Part 8, but in relation to annual well levy imposed on registered holders of State/Territory petroleum titles in designated coastal waters by section 10B of the Regulatory Levies Act.

Regulation 51 - Definitions for Part 9

Regulation 51 defines particular terms that are used in Part 9.

Regulation 52 - Amount of annual well levy

Regulation 52 makes provision for the same matters as regulation 49, but in relation to annual well levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 49.

Regulation 53 - When annual well levy is due and payable

Regulation 53 makes provision for the same matters as regulation 50, but in relation to annual well levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 50.

Part 10 - Well activity levy - Commonwealth petroleum titles

Part 10 (regulations 54 to 56) relates to well activity levy imposed on registered holders of petroleum titles in Commonwealth waters by section 10C of the Regulatory Levies Act.

Regulation 54 - Definitions for Part 10

Regulation 54 defines particular terms that are used in Part 10.

Regulation 55 - Amount of well activity levy

Regulation 55 provides for the amount of well activity levy imposed on:

(a) an application submitted by a titleholder to NOPSA under regulation 5.06 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011 (RMA Regulations) for acceptance of a well operations management plan; and

(b) an application submitted by a titleholder to NOPSA under regulation 5.23 of the RMA Regulations for approval to commence an activity relating to a well.

The amount of levy payable on an application for acceptance of a well operations management plan is $20,000.

The amount of levy payable on an application for approval to commence an activity relating to a well is $10,000.

Regulation 56 - When well activity levy is due and payable

This regulation provides for when well activity levy is due and payable.

Well activity levy is payable at the time the titleholder submits an application to NOPSA for acceptance of a well operations management plan under regulation 5.06 of the RMA Regulations or for approval to commence an activity relating to a well under regulation 5.23 of the RMA Regulations.

Well activity levy is due 30 days after the levy becomes payable.

Part 11 - Well activity levy - State/Territory petroleum titles

Part 11 (regulations 57 to 59) makes provision for the same matters as Part 10, but in relation to well activity levy imposed on registered holders of State/Territory petroleum titles in designated coastal waters by section 10D of the Regulatory Levies Act.

Regulation 57 - Definitions for Part 11

Regulation 57 defines particular terms that are used in Part 11.

Regulation 58 - Amount of well activity levy

Regulation 58 makes provision for the same matters as regulation 55, but in relation to well activity levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 55.

For this regulation, an application for acceptance of a well operations management plan would be under a regulation of a State or Territory that substantially corresponds to regulation 5.06 of the Commonwealth RMA Regulations. An application for approval to commence an activity relating to a well would be under a regulation of a State or Territory that substantially corresponds to regulation 5.23 of the Commonwealth RMA Regulations.

Regulation 59 - When well activity levy is due and payable

Regulation 59 makes provision for the same matters as regulation 56, but in relation to well activity levy imposed on State/Territory petroleum titleholders. See discussion in relation to regulation 56.

Item 5 - Part 6

This item re-numbers existing Part 6 of the Principal Regulations as Part 12.

Item 6 - Regulation 36

This item re-numbers existing regulation 36 of the Principal Regulations as regulation 60.

Item 7 - Regulation 37

This item re-numbers existing regulation 37 of the Principal Regulations as regulation 61.

Item 8 - Regulation 38

This item re-numbers existing regulation 38 of the Principal Regulations as regulation 62.

Item 9 - Paragraph 38(3)(c)

This item inserts an additional requirement for the CEO of NOPSA to give a copy of its annual financial reports assessing the cost-effectiveness of NOPSA's operations to each registered holder of a Commonwealth or State/Territory petroleum title for whom well investigation levy, annual well levy and/or well activity levy has been due and payable during the financial year. The report is required to be provided at least one month before the meeting that the CEO of NOPSA is required by the principal Regulations to hold each year with representatives of the offshore petroleum industry, to discuss the cost-effectiveness of the operations of NOPSA.

NOPSA is subject to existing requirements to prepare annual financial reports and have these independently audited. Currently, the CEO of NOPSA is also required to provide a copy of the report to:

* The Australian Petroleum Production and Exploration Association;

* Each operator of a facility and licensee of a pipeline licence in relation to which levy has been due and payable during the financial year;

* Any other person to whom the CEO believes it would be appropriate to give the report.

The additional requirement that is inserted in this regulation ensures that titleholders who have been required to pay well-related levies are also provided with information about the cost-effectiveness of NOPSA's operations, including information about any proposed changes to levy amounts, so that this information is available to all parties that have been levied under the Regulatory Levies Act and the Regulatory Levies Regulations.

Item 10 - Regulation 39

This item re-numbers existing regulation 39 of the Principal Regulations as regulation 63.

Item 11 - Further amendments - Regulatory Levies Act

This item removes all references to the "OPGGS(SL) Act" (i.e. the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (Safety Levies Act)) in the principal Regulations, and replace them with references to the "Regulatory Levies Act" (i.e. the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003). This is to reflect the re-naming of the Safety Levies Act following commencement of Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Act 2011.

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