February 14 - 20, 2021: Issue 483


PEP-11 Licence Expires Without An Official Decision: State Minister Reported To Be A ‘Nay’, Federal Minister Indicates Will Give A Yea’

The licence for the PEP-11 exploration offshore of Sydney, stretching from Newcastle to Sydney's Manly, expired on February 12th 2021 without any decision on an application to extend it being officially listed on the NEATS page for this permit. The permit area is primarily within commonwealth waters, which begin 5.5km offshore.

On February 5th 2021 the company announced it had made a submission to extend the permit for two years, which would extend proposed activities until 2023.

‘’BPH Energy Limited ( ASX:BPH) wishes to advise that investee Advent Energy Ltd has on behalf of the PEP11 joint venture submitted to the National Offshore Petroleum Titles Administrator (NOPTA) an application to extend the PEP11 permit offshore NSW. (Advent, through wholly owned subsidiary Asset Energy Pty Ltd, holds an 85% interest and is operator of the permit. Bounty Oil and Gas NL ( ASX:BUY) holds the remaining 15%).''

BPH has an interest of 22.7 % in Advent Energy Ltd. MEC Resources Ltd (ASX MMR) holds an interest in Advent. Advent holds an 85% interest in the PEP11 permit.

The application was made under the COVID-19 -Work Bid Exploration Permits announcement released by the Federal Government on 20th April 2020.

In that release the Government recognised the that the COVID-19 pandemic was having a significant impact on the offshore petroleum sector and that additional flexibility would be required to assist titleholders to manage the COVID -19 crisis. The Joint Authority confirmed in that release that it regarded the COVID-19 pandemic as a force majeure event.

The application is for a 24 month suspension of the Permit Year 4 work program commitments, with a corresponding 24 month extension of the permit term was accepted for processing by NOPTA on February 4th 2021. 

While it was due to expire on Friday February 12th, the PEP-11 licence has now entered a rollover period and exploration can continue until a final decision is made.

Advent has previously stated it has secured the semi-submersible drilling rig Ocean Patriot and intends to drill the first well offshore NSW to evaluate a target of multi-TCF size. 

In December, BPH announced it had appointed Professor Peter J Cook, an Australian expert on CCS, to join the team working to develop the huge PEP-11 offshore gas field.

Last week BPH raised $9 million in an oversubscribed share placement to increase its stake in Advent to 33% ahead of the planned drilling of the offshore Baleen gas prospect within PEP 11.

In December 2020 Advent announced it has appointed Professor Peter Cook as an advisor on the geosequestration — the geological storage of carbon dioxide — for this project.

On Tuesday February 9th, the company announced it has appointed Andrew Hogan as Contract Manager. Mr. Hogan is known in the drilling and completion industry and has been engaged to advise and assist Advent Energy in the procurement of key equipment and services for the drilling of the proposed Baleen well in PEP-11.

NSW Minister The Hon. John Barilaro MP, Department of Resources and Geoscience and Federal Minister The Hon. Keith Pitt MP, Department of Industry, Science, Energy and Resources are the Joint Authority members for offshore areas in New South Wales. If both these ministers disagree, then the responsible Commonwealth Minister will have the last say.

On Wednesday New South Wales' Deputy Premier, John Barilaro, said he was not in favour of the oil project and the application should be rejected.

According to the Central Coast Community News, Mr Barilaro said he will “refuse further applications to extend the life of PEP 11.”

He added that “PEP 11 was issued under a Commonwealth Act, the exploration area is in Commonwealth waters, and the ultimate decision-making power rests with the Commonwealth.”

Mr. Barilaro went on to say that further drilling would be a disaster even if things went well, "but if they didn’t, it could be potentially catastrophic."

BPH responded to the news in a statement which said: “The Joint Venture notes there have been reported press comments on 10th February 2021 attributed to the NSW Deputy Premier and Minister for Regional Industry and Trade, the Hon. John Barilaro MP. The Joint Venture has received no communication from the National Offshore Petroleum Titles Administrator (NOPTA) in respect of its current applications.”

BPH and its Joint Venture Partners have sought clarification from NOPTA.

The statement added: “The Joint Venture Partners note that the Joint Venture has safely drilled on the PEP 11 permit previously to test for gas and it is confident it will safely do so again. The Joint Venture Partners have retained internationally recognised consultants to assist in this program. The Joint Venture Partners have just announced the appointment of a contracts manager for the Baleen well and are in the process of securing a rig and will release further details on this shortly.”

"The Joint Venture looks forward to confirmation from NOPTA of the approval of its applications," BPH told the market this week.

"Advent Energy is a strong supporter of plans for Net Zero by 2050 and sees the company playing a direct role in achieving that target, especially in New South Wales," the company said.

"It aims to do this in two ways: First, by finding gas closest to Australia’s biggest energy market; gas which can be used to provide reliable back-up for increased uptake of renewable energy in NSW. Second, through its plans to explore for opportunities in offshore NSW for carbon capture and storage (CCS), a key clean energy technology," it added.

The Hon. Keith Pitt MP has indicated he will follow through on the Morrison Ministries much announced 'gas led recovery.'.

In an 'doorstop' interview with a unnamed interviewer dated February 5th, 2021 and published on the Federal Department of Industry website, as well as through comments made to the ABC, the Minister for Regional Industry and Trade stated any rigs would be around 30 kilometres offshore, and hard to see from the coast.

February 5th was the same day Surfrider Australia announced that the leader of the Australian Labor Party Anthony Albanese officially stated he opposes the PEP-11 project.

Meeting in Terrigal the Australian Labor Party, Surfrider Foundation Australia, and Save Our Coast / Stop Seismic Testing met to announce Australian Labor’s opposition to the project. 

Mr. Albanese said then of the PEP-11 proposal “This proposal is just not on, this proposal lacks common sense. It's bad for jobs. It's bad for communities. It's bad for our natural environment.” 

During his interview of the same date Mr. Pitt stated, ''Well, firstly, each-way Albo's become no way Albo. He doesn't support coal now, he doesn't support offshore oil and gas. We have had an industry in Australia with offshore oil and gas for more than five decades - it's offshore Victoria; it's off of the 12 Apostles; it's off the West Coast. It's been a very significant part of our economy. I'll continue to provide the confidence and the support that industry needs. We will maintain a regulatory provision which is consistent, and my decision will be based on advice and the facts.''

When asked; That licence covers a large area - from the central coast all the way down to Sydney Harbour. Does that need to be reduced down?''

'Mr. Pitt replied, ''... that is the size of the exploration permit which is being applied for. And fundamentally, this is a needle on a football field. So, I think we need to keep some perspective. It's more than 30 kilometres offshore. It's something which has been tested back in around 2010 unsuccessfully, they didn't find any gas in that last exploration permit. But in Australia, companies are able to put up an application and work their way through a known process and get a result.''

When the unnamed interviewer pointed out that if they didn't find gas then, then there's a good chance they won't find gas there now. So, what's the point in renewing it?

Mr. Pitt replied, ''Well, as you've said, it's a very large area. Companies make their own decisions based on risk and where they invest their finances. Exploration is an important part of growth for the resources sector. That's why we committed another $125 million to exploring for the future. It means that we will have options into the future for onshore gas and of course, resources and water. It's a big part of our economy and we want to continue with those jobs.''

When asked ''how does gas drilling fit in with the net-zero emissions?'' so recently being spoken about at a federal level

Mr. Pitt maintained that gas will be an important part of our recovery.

'' Minister Taylor is doing a good job in terms of emissions reduction. We have a technology road map, we have a plan to get to 2030, and that's what we'll continue to do.''

When asked what his personal thoughts on the permit being extended Mr. Pitt stated ''Well, I'm the Minister for Resources. I'll make decisions as all ministers should, based on the advice that I'm provided.''

The subject of our coasts being a part of the whale highway north and then south again, and the reason a prior application to do seismic testing during these annual migrations was deferred, came up as well. 

Mr. Pitt stated, ''Of course, we look to ensure that the environment is protected, that's why we have such strong regulations. That's why we have the regulator in NOPSEMA in place. We have had an industry for more than five decades, it's been incredibly successful. In fact, Victoria for example, its manufacturing industry is built off the back of cheap gas out of the Bass Strait and elsewhere. We want to continue to drive our economy, but we'll do it in a way which is balanced.''

Mr Pitt said in closing, ''Once again, we'll make a balanced decision based on the advice that's provided.''

The Federal Department of Industry, Science, Energy and Resources released the 2021 Offshore Petroleum Exploration Acreage Release nominated areas for comment in January, with comments closing March 8th. The annual Offshore Petroleum Exploration Acreage Release is a key part of the Australian Government's strategy to encourage petroleum exploration in Australia’s offshore waters. 

The areas marked have been nominated by petroleum industry stakeholders. If issues raised through the consultation process are considered to be manageable through regulatory approvals processes, the area is likely to be made available for bidding.

The release of acreage does not necessarily mean exploration activities will occur. Exploration companies must bid for a release area and be assessed as a deserving applicant prior to award of a petroleum exploration permit. Should a permit be awarded, it authorises the holder to apply to the regulator, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), for approval to undertake an exploration activity.

The Australian Government regulates oil and gas activities in Australian Commonwealth waters under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. These waters are the offshore area beyond coastal waters, between 3 and approximately 200 nautical miles from shore. The regulatory activities include permits, leases and licences (titles), environmental management, occupational health and safety and well integrity.

The Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Act 2020 ''to enable title administration and regulation of a greenhouse gas storage formation that straddles the boundary between state and Northern Territory coastal waters and Commonwealth waters'' should also be noted as it relates to this proposal.

The proponents are making all the right announcements about engaging all the right people to get the decision they want. They run parallel to Federal government announcements on their proposed way forward until some as yet unmade advancements in technology, industry and policy produce a cleaner way to provide energy. They have also quoted the ''under Covid-19 clause'' which is also beginning to attract severe criticism about what's been allowed to go ahead under enforced state and federal regulations - the reduction or complete removal of transport services, the destruction of environment so industry may 'pick itself back up', the closure of businesses in a variety of industries that will not be able to open their doors again.

As has been well demonstrated by our 200 Colonial history, and even recent events, the voiceless environment and all that live in it is expected to foot the bill and pay with its very life for our own species increasing appetite for a comfort filled and easy life or access to areas that should be reserved for wildlife and plant species alone. Humans first, the environment that actually supports their survival last, is being perpetuated - until extinction do we part.

On the obverse, both State and local Federal ministers have also indicated they are opposed to PEP-11 and any wells off our beaches. 

Although some have stated these are merely cynical attempts to keep their constituents happy by making all the right 'noise', they are also a rebuff to the 'business as usual' approach being signalled by those who have indicated PEP-11 will get another go ahead and we may soon see at least one well of another ilk off Newcastle. 

At this stage, the rebuff is all the local communities from Newcastle to the central coast, Pittwater and Manly will take out of a several years campaign to keep our offshore waters safe for what lives or migrates there and our shores free from what happens when things go wrong - again.

report by A J Guesdon
February 14, 2021