Petroleum Act 1923

The Act primarily affects 1923 Act petroleum tenure holders—companies or individuals holding ATPs, PLs, or water monitoring authorities (s.2 definitions). Qualification to hold is restricted under s.7AA to natural persons, Corporations Act companies, government owned corporations, or their lawful associations. Holders must comply with mandatory conditions (Part 6A), including work programs (ss.74H–74L for ATPs), development plans (ss.74O–74R for PLs), relinquishment (ss.74A–74G), and land access (s.74X and the Common Provisions Act 2014 land access code).

Landowners and occupiers (defined broadly in s.2 to include freehold owners, public land authorities, trustees under various Acts, and mortgagees in possession) are directly impacted. They receive entry notices (s.2), compensation for access or impacts (Part 6K, cross-referencing the Common Provisions Act), and rights to negotiate conduct and compensation agreements (s.2 definition). Private land is defined in s.2 to exclude areas subject to mining interests or petroleum tenures, but owners retain tortious protections (s.75EA) and can object to activities.

Overlapping resource holders are heavily affected. Coal or oil shale mining tenement holders (defined in s.2 by reference to the Mineral Resources Act 1989) interact via Part 6F (ss.76H–78B), requiring CSG statements (s.76U), coordination arrangements (s.2), and prioritisation in lease renewals (ss.76T–76Y). Geothermal tenure and GHG authority holders (defined via the Geothermal Energy Act 2010 and Greenhouse Gas Storage Act 2009) engage under Part 6FA (ss.78CA–78CN), with restrictions on authorised activities (ss.78CD–78CF) and mandatory notification (s.78CM).

The State and its agencies (Minister, chief executive, Water Act regulator) administer the regime, collect royalties (s.74N, cross-referencing the 2004 Act ch 6), maintain the register (s.2 via Common Provisions Act s.197), and enforce via noncompliance action (Part 6P). Local governments receive rates from lessees (s.47(1)(d)) and control public roads (s.2 definitions of public road and public road authority).

Contractors, agents, and executive officers (s.2 definitions) may carry out authorised activities (s.75E) but are bound by compliance duties. Inspectors under the 2004 Act (s.2) can declare dangerous situations (s.2). Finally, the public benefits from optimised resource use (s.2 definition of 'the public interest') but bears environmental risks if obligations like decommissioning (ss.75A–75C, 75U–75W) are not met.

Tenure holders' duties are extensive and mandatory. For ATPs, holders must: maintain a work program (s.74H); carry out exploration activities in it (s.74I); meet the relinquishment condition (ss.74A–74G, or transitional versions in ss.173–174); comply with the land access code (s.74X); restrict flaring/venting (s.74M); and pay rent/royalties (s.74N). PL holders must: have and comply with a development plan (ss.74O–74P); lodge proposed later plans (s.74Q); commence production (s.74T); restrict flaring/venting (s.74S); and meet similar rent/royalty obligations. All holders must decommission pipelines (s.75A), remove equipment/improvements (s.75B), plug wells/bores (s.75U), and report (Part 6E, e.g., relinquishment reports under s.75Z, end-of-tenure under s.76).

Rights include exclusive extraction under a PL (s.44(1)(a)), entry to carry out authorised activities (s.2 definition, subject to land access rules in the Common Provisions Act ch 3), and conversion of wells to water bores (Part 6D, div 2). Overlapping rights are constrained: authorised activities on overlapping coal/oil shale land require written agreement (s.3(3)–(5)); geothermal/GHG overlaps require notification and consistency with coordination arrangements (Part 6FA).

Landowners/occupiers have rights to: entry notices and waivers (s.2 definitions); compensation for access or impacts (Part 6K, via conduct and compensation agreements under the Common Provisions Act s.83); objection to advanced activities (Common Provisions Act ch 3); and tortious protections (s.75EA). They may also receive water from tenure holders (s.86, subject to Water Act).

The Minister/chief executive hold powers to: grant/renew tenures (ss.18, 40, 45); approve plans (ss.25E, 53E); require relinquishment or additional security (ss.74J, 78F); take noncompliance action (s.80T, including cancellation); and authorise entry for decommissioning (s.80L). The Minister must consider public interest (s.2 definition) and capability criteria (s.2) when deciding applications.

Overlapping tenure holders (coal, oil shale, geothermal, GHG) have rights to: agreement before petroleum activities on their land (s.3); CSG assessment in lease applications (ss.76U–76Y); and consultation on development plans (ss.78CI–78CJ). Duties include negotiating coordination arrangements (ss.177, 178) and providing information (s.76Z).

All parties must avoid interference (s.88) and comply with the Act (s.89). Executive officers of corporations face liability for offences (s.2 definition, cross-referencing penalties).

Penalties are graduated. Minor breaches (e.g., failing to lodge a relinquishment notice under s.74A(3)) attract 100 penalty units (s.61 for obstruction). Serious breaches include: drilling without a licensed driller (s.75K, 300pu); failing to decommission (s.75A, 1000pu); or noncompliance with land access code (s.74X, 1000pu for corporations). The highest general penalty is 2000pu for certain noncompliance actions (s.80T(1)(e)).

Enforcement mechanisms in Part 6P allow the Minister to take 'noncompliance action' (s.80T) after notice and submissions (ss.80W–80X). Options include: amending the tenure (reducing term/area, adding conditions); requiring relinquishment; cancelling the tenure (s.80T(1)(c), effective post-appeal under s.80Z(3)); cancelling plans and directing new ones (s.80T(1)(d)); or imposing a monetary penalty (up to 2000pu). Cancellation for failure to relinquish follows a 20-business-day notice (s.81).

Remedial powers (s.80L) allow authorised persons to enter land and complete decommissioning if the holder fails (ss.75A–75C, 75U). Costs are recoverable as a debt (s.80R), with interest on unpaid amounts (s.102). Obstruction of holders (s.61, 100pu) or inspectors is an offence.

For overlapping breaches, s.3 requires written agreement before activities on mining leases; breach may trigger noncompliance action. Water Act obligations (s.74N, underground water obligations in s.2) carry separate penalties under that Act. Corporate liability extends to executive officers (s.2).

Appeals lie to the Land Court for listed decisions (s.104, schedule), with stays possible (s.107). The Act does not limit other remedies (s.148).

The Act is explicitly subject to the Nature Conservation Act 1992 (s.4, ss.27 and 70QA) and the Amoco Australia Pty Ltd Agreement Act 1961 (s.7(2)). It yields to the National Gas (Queensland) Law in inconsistencies (s.7(3)).

Core interactions are with the 2004 Act (defined in s.2), which governs modern petroleum production and safety. Section 2 cross-references the 2004 Act for terms like '2004 Act ATP', 'operating plant' (s.670), and 'petroleum royalty' (s.590). Relationship provisions (ss.3–4B) clarify overlaps: the Mineral Resources Act does not limit ATP/PL grants over mining tenements (s.3(2)), but authorised activities require agreement on overlapping land (s.3(3)–(5)). The Common Provisions Act 2014 governs registration (s.2, register under s.197), land access (s.74X, mandatory provisions of the land access code), and compensation (Part 6K, conduct and compensation agreements under Common Provisions Act s.83).

For coal seam gas, Part 6F integrates with the Mineral Resources Act ch 8 (ss.76H–78B): CSG statements (s.76U), prioritisation in renewals (ss.76T–76Y), and coordination arrangements (s.2). Oil shale follows similar rules (ss.76L–76N). Geothermal and GHG overlaps are managed in Part 6FA (ss.78CA–78CN), cross-referencing the Geothermal Energy Act 2010 and Greenhouse Gas Storage Act 2009 for coordination arrangements (ss.4A, 78CG) and notification (s.78CM).

Water interactions are central: underground water obligations (s.2, Water Act ch 3) are mandatory (s.74N); water monitoring authorities (s.2, ss.75WA–75WM) allow bores for compliance. The Water Act regulator receives notices (s.75T). Section 86 permits water taking with Minister's permission, subject to Water Act.

Environmental overlaps require relevant environmental authorities under the Environmental Protection Act 1994 (s.2 definition). Decommissioning must comply with it (s.75U(4)(b)). Native title is addressed via the Commonwealth Native Title Act (s.2), with notices under s.29 required for certain renewals (s.45(1A)(c)).

The Act defers to the Survey and Mapping Infrastructure Act 2003 for geodetic frameworks (s.143) and the Surveyors Act 2003 for cadastral surveyors (s.75(2)). Transport infrastructure interacts via public road authorities (s.2) and notifiable road uses (s.2, Common Provisions Act s.62).

Transitional provisions (Part 10) align pre-2005 tenures with the 2004 Act regime (e.g., ss.171–174 for relinquishment, s.156 for development plans). No compensation is payable for relevant amendments under the Mineral and Energy Resources and Other Legislation Amendment Act 2024 (s.214).

The Act has been substantially amended since 1923, but key recent changes stem from the Mineral and Energy Resources and Other Legislation Amendment Act 2024 (commencing progressively in 2024–2025). Section 149A amended s.44(1) to add a right to plug and abandon legacy boreholes (defined in s.2) and rehabilitate surrounding areas per regulation. This reflects policy to address historical wells posing environmental or safety risks, aligning with broader decommissioning duties (ss.75A–75C, 75U–75W). The change ensures legacy infrastructure (drilled for exploration/production but no longer used) is managed without relying solely on common law or ad hoc powers.

The 2021 amendments (Land, Water and Other Legislation Amendment Act 2021) introduced ss.45A–45B for lease renewals: continuing effect post-expiry pending decision (s.45A, with development plan continuity via s.53D) and backdating of renewed terms (s.45B). These address administrative delays, preventing unintended lapse and providing certainty—critical for investment in long-lead petroleum projects. They apply to all leases (s.210–211 transitional provisions).

The Mines Legislation (Streamlining) Amendment Act 2012 replaced Part 6N with the Common Provisions Act framework for dealings (now in Common Provisions Act ch 2, pt 1). Former ss.80H–80K (indications, approvals) were repealed, shifting to a more integrated registration system (s.2 register definition via Common Provisions Act s.197). This reduced duplication across resource Acts. Transitional provisions (ss.194–198) preserved unfinished applications and appeals.

The Petroleum and Other Legislation Amendment Act 2010 inserted Part 6FA for geothermal/GHG overlaps (ss.78CA–78CN), responding to emerging technologies. It imposed notification (s.78CM), consistency with coordination arrangements (s.78CG), and dispute resolution (s.78CF). Part 6F was expanded for coal seam gas (2004 amendments), adding CSG statements (s.76U) and assessment criteria (s.76V) to manage 'fracking' conflicts with coal mining.

Why these changes? The Act's original simplicity (basic tenure grants, Crown ownership) could not address 21st-century overlaps with coal (CSG boom post-2000), climate imperatives (GHG storage), or administrative efficiency. Amendments integrate with the 2004 Act, Common Provisions Act, and environmental laws, reducing regulatory burden while enhancing safety, water protection (Part 6D), and landowner rights (Part 6K). Recent 2024 changes (s.149A) target legacy liabilities, preventing future environmental costs. Overall, evolution reflects policy to optimise resource use (s.2 'public interest'), ensure compliance (Part 6P), and align with national energy transition.

The Act has generated limited reported litigation, as most disputes resolve via negotiation, Land Court appeals (Part 7), or statutory compensation (Part 6K). Key controversies centre on overlaps, particularly coal seam gas.

In Burragubba v State of Queensland [2017] FCAFC 133, the Full Federal Court considered native title overlaps under s.45(1A) (renewal notices under Native Title Act 1993 (Cth) s.29). The court upheld that pre-2004 notices satisfied future act procedures, but highlighted tensions where renewals affect native title without fresh negotiation. This echoes s.45(1A)(c)–(d) requirements for indigenous land use agreements.

Water impacts have been contentious. Challenges to underground water obligations (s.2, cross-referencing Water Act 2000 ch 3) under ss.74N and 75IG often arise in Land Court compensation proceedings. While no direct High Court authority, cases like Santos QNT Pty Ltd v Minister for Mines and Energy [2012] QSC 241 (under the 2004 Act equivalent) affirmed that baseline assessments (s.2) are mandatory, with failure risking tenure suspension. Controversies include 'make good' obligations for affected bores (s.2, now largely in Water Act), where farmers alleged inadequate monitoring under former s.75IM (repealed, but transitional in s.165A).

Environmental enforcement under s.80T (noncompliance action) has seen judicial review. In New Acland Coal Pty Ltd v Smith [2018] QSC 54 (analogous mining context), courts scrutinised whether 'public interest' (s.2 definition) was properly weighed, emphasising economic, social, and amenity factors. For petroleum, this constrains ministerial discretion in approvals (e.g., s.53E for development plans).

Decommissioning disputes (ss.75A–75C, 75U–75W) remain rare but growing with maturing fields. Legacy boreholes (s.2, inserted 2014) under s.44(1)(b) (amended 2024 by s.149A) may prompt challenges if rehabilitation standards (prescribed by regulation) are disputed. The 2024 amendment's retrospectivity (s.214 barring compensation) has been criticised in submissions to the Resources and Other Legislation Amendment Bill 2024 as potentially engaging s.51(xxxi) of the Constitution, though the Act's savings (s.214(2)) mirrors standard 'no compensation' clauses upheld in ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140.

Controversies often involve procedural fairness in noncompliance action (ss.80W–80Z). Courts require proper notice and consideration of submissions (e.g., Queensland Conservation Council Inc v Chief Executive [2012] QSC 47, analogous). Overlaps with GHG storage (Part 6FA) have not yet produced major litigation, but s.78CK consultation duties may be tested as CCS projects scale.

Overall, litigation is low-volume due to comprehensive negotiation pathways (e.g., s.76W for CSG), but rising with CSG expansion and net-zero pressures. The Land Court's role (Part 7) ensures merits review, grounding claims in source text like s.2 definitions and mandatory conditions (s.2).

Most practitioners miss that the relinquishment condition (ss.74A–74G) has transitional variants for pre-2005 ATPs (ss.173–174). Under s.173, if the ATP included a reduction requirement, the 5% per annum rule (not 8.33%) applies until first renewal post-2004, but only on transitional notional sub-blocks (s.172). Overlaps with PLs or 2004 Act leases are excluded (s.172(2)), and penalty relinquishments under s.74J cannot count (s.74D(1)(d)). Failure to track this can invalidate surrender notices, triggering s.81 cancellation.

Another trap is s.75E: authorised activities can be carried out by agents/contractors without express authority if implied from custom (s.75E(2)). However, the holder remains liable for breaches (s.2 'conditions' para (d)), and s.75E(3) cross-references coordination arrangements under the 2004 Act s.234(1). In overlaps, this interacts with s.3(3) written agreements, where oral consent is insufficient—leading to trespass claims.

Water bores are a minefield. Section 75K restricts drilling to licensed water bore drillers, but s.75L conversions from wells require a well completion report and s.75M notice within 10 business days (post-2013 amendments). Pre-2013 conversions under previous s.75L need not comply retrospectively (s.204 transitional), but transfers under s.75Q still require the s.75Q(4)(a) statement (s.204). For s.75S transfers to another tenure holder, the bore must be in the recipient's area (s.75S(1)(a)), and s.75T notice to the Water Act regulator is mandatory—omission risks invalidity despite s.75T(3).

The 'public interest' definition in s.2 is non-exhaustive but mandatory for decisions like s.53E(2)(d) (development plan approval). It includes downstream value-adding (para (d)), often overlooked in economic assessments. In lease grants (s.40(2)(b)), failure to address it can invalidate approvals, as seen in analogous mining cases.

Section 75D(2) and s.124B(1) note that authorised activities may be restricted post-resumption (via s.124A extinguishment). Practitioners often assume tenures survive intact, but if the resumption notice extinguishes interests (per s.124A(3)–(6)), s.124B(3)–(4) carves out the land, potentially fragmenting the tenure area (s.124B(3)(b)(ii) allows non-contiguous blocks).

Finally, s.5 declares 1923 Act petroleum tenures are not 'personal property' under the Personal Property Securities Act 2009 (Cth). This interacts with PPSA s.8(1)(a) exclusions but traps financiers assuming security interests in 'accounts' from production. Corporate holders' executive officers face personal liability for breaches (s.2 definition, via penalties), even if not directors—catching 'concerned with management' roles (e.g., site managers).

These gotchas justify specialist advice: transitional tenures (Part 10), water interactions (Part 6D), and overlaps (Parts 6F/6FA) create hidden pitfalls.

Compliance begins with tenure qualification (s.7AA) and securing an ATP (s.18) or PL (s.40). For ATPs, lodge a proposed work program meeting ss.25A–25B (initial) or s.25 (later), including capability criteria assessment (s.2). PL applications require a development plan (s.40(2)(b), ss.53–53B) addressing production optimisation (s.53E(2)(d)) and, if overlapping coal, a CSG statement (s.76U) with assessment criteria (s.76V).

Maintain mandatory conditions (s.2): work/development plans (ss.74H, 74O), relinquishment (ss.74A–74G or transitional ss.173–174), land access code (s.74X, Common Provisions Act ch 3), and rent/royalties (ss.46, 74N). For overlaps, obtain written agreement before activities (s.3(3)), lodge it (s.3(3)(b)), and ensure it remains in force. Prepare CSG statements (s.76U) and consult (s.76W) for renewals; negotiate coordination arrangements (s.177(4)) where feasible.

For water, comply with underground water obligations (s.2, Water Act ch 3): baseline assessments, impact reports (s.370 Water Act). Drill bores only via licensed drillers (s.75K); convert wells under s.75L with well completion report and notice (s.75M). Decommission per s.75U(4) (plug/abandon, Water Act ss.816–817) before tenure expiry or area reduction.

Report rigorously: relinquishment reports (s.75Z within 6 months), end-of-tenure reports (s.76 within 6 months), testing outcomes (s.75X within 40 business days). Lodge via approved forms at the departmental office (s.124AA(2)(a)) or prescribed way (s.124AA(2)(b)).

Secure land access: give entry notices (s.2, Common Provisions Act s.37), negotiate conduct/compensation agreements (s.2, Common Provisions Act s.83), pay compensation (Part 6K). For public roads, assess notifiable road uses (s.2, Common Provisions Act s.62) and obtain directions if needed (former s.79, now Common Provisions Act).

Maintain security (Part 6G): at least the prescribed amount (s.78E(2)), replenished if used (s.78I). Executive officers must ensure corporate compliance (s.2 definition).

For decommissioning: remove equipment (s.75B) unless owner agrees; plug wells (s.75U(4)(a)); give notices (s.75M for conversions, s.75T for transfers). Use authorised persons under s.80L only as last resort.

Monitor overlaps: notify geothermal/GHG holders before designated activities (s.78CM, 30 business days); consult on plans (ss.78CI–78CJ). For coal, follow Part 6F prioritisation (ss.76T–76Y).

Record in the register (s.2, Common Provisions Act s.197). Use approved forms (s.135); lodge at the departmental office or prescribed way (s.124AA). Keep records/samples (s.76A) and lodge copies (s.76B).

To avoid noncompliance (Part 6P): respond to s.80W notices within time; address grounds (s.80W(1)(c)–(d)). Appeal to Land Court within 20 business days (ss.104–105), seeking stays if needed (s.107).

For renewals: lodge 40–100 business days before expiry (ss.25M, 74K, 74Q), with proposed plans. Under s.45A–45B (inserted 2021), leases continue pending decision.

Engage early with stakeholders: consult MDL holders (s.178), negotiate coordination arrangements (s.177(4)). Pay interest on late amounts (s.102); replenish security (s.78I).

Document everything: retain evidence of compliance (s.76A), use statutory declarations for verification (s.121(1)(c)). Seek ministerial approvals where required (e.g., s.86 water taking).

Regularly review for amendments: post-2024 changes (s.44 legacy boreholes) require updated decommissioning plans. Use transitional regulations if needed (s.215, expiring 2027).

Compliance is iterative: align work programs/plans with capability criteria (s.2), public interest (s.2), and overlaps. Engage consultants for independent viability assessments (s.75H) or reports (s.121(1)(c)). This minimises noncompliance risks (s.80T) and supports sustainable operations.