DRAFT GUIDELINES FOR PETROLEUM LEGISLATION

The Petroleum Legislation Amendment Act 2024 (WA) (Amendment Act) was introduced in 2024, legislating for two new industries in Western Australia: greenhouse gas transport and storage and the exploration and production of natural hydrogen and helium (Regulated Substance).

The Department of Mines, Petroleum and Exploration (DMPE) has developed three draft guidelines which intend to assist proponents navigating the new legislation.

Applying to add regulated substance rights to a petroleum title

·       The Amendment Act enables Regulated Substance Rights (RS Rights) to be granted on new or existing petroleum titles for the exploration and recovery of a Regulated Substance. Where granted, the Minister will provide a memorial instrument to evidence the approval.

·       Applications must be submitted in writing to the Minister, specifying the Regulated Substance and relevant particulars including geological evaluation and the exploration rationale.

·       The RS Rights works program is separate from any commitments related to the existing title, with the Minister able to amend existing conditions during the process.

 Assessment criteria for Petroleum, Geothermal and Greenhouse Gas Exploration permits

·       The DMPE is releasing acreage for competitive bidding across three classes of exploration permits: petroleum, geothermal energy, and greenhouse gas (GHG) storage permits.

·       To be granted a permit, the Minister must be satisfied that the proposed work program will significantly advance understanding of the relevant resource or storage potential.

·       Applicants must meet the minimum criteria in the guideline. The minimum criteria covers technical ability, financial capacity and a detailed six-year work program supported by geological evaluation.

·       Where multiple applications cover the same area, the Minister will rank applicants by merit across four criteria to then select the highest ranked application.

Application for the declaration of an identified greenhouse gas storage formation

·       Any GHG storage project in Western Australia requires the Minister to first declare an identified GHG storage formation (Formation) before a retention lease or injection licence can be granted (Declaration).

·       Applications may be made by registered holders of a GHG exploration permit, or a petroleum or geothermal retention lease or production licence.

·       An eligible Formation must be capable of permanently storing at least 100,000 tonnes of GHG substance. The applicant must demonstrate this by evidence of suitable injection points, intended injection periods and effective sealing attributes.

·       The Minister must make a Declaration if satisfied that the formation is eligible and a reasonable estimate of the spatial extent is provided.

·       The Minister retains discretion to vary or revoke a Declaration at any time. A 120-day decision timeline applies.

Conclusion

The Amendment Act supports two new industries in Western Australia related to existing petroleum, greenhouse gas and geothermal projects. The draft guidelines produced by the DMPE intend to clarify the processes related to the application and assessment of the new rights and permits.