Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Hansard source

I rise to provide the closing arguments on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash Bidding) Bill 2013 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2013. Every year the Australian government releases offshore exploration acreage for competitive bidding. The areas released are selected to offer the global petroleum exploration industry a variety of investment opportunities. The regular release of acreage ensures that Australia has a pipeline of exploration investment opportunities—an essential component of Australia's retaining its attractiveness as a premier investment destination for the oil and gas industry.

Currently, the Australian offshore acreage is allocated through a competitive work-bidding system, essentially, a tender system, whereby exploration acreage is awarded to those who will undertake the most comprehensive program of exploration. The system has served Australia's interests well to date and will continue to do so in the future for frontier area basins where the geology is less understood.

However the inclusion of cash bidding starting in the 2014 offshore exploration acreage as an additional method of exploration permit allocation in mature areas or those known to contain petroleum accumulations, is intended to prevent over-exploration where none or little may be required and to ensure the release of these areas continues to be equitable, economic and efficient. To enable this, the minister, Minister Macfarlane, introduced this bill containing amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to optimise the existing cash-bidding system in respect of both efficiency and administrative integrity by setting a reserve price in advance of bids being received, which will help to ensure the government does not sell the right to explore below its value and ensuring a return to the Australian community. It requires prequalification of bidders to ensure that eligible bidders have the requisite technical and financial capacity, encouraging serious and genuine bidding through the requirement to pay a 10 per cent deposit together with a placement of a cash bid, and specifying nondiscretionary tie-breaker mechanisms.

The member for Makin asked whether there is an appeal mechanism for bidders if they are assessed as unsuitable. Our response to that is that the Administrative Decisions (Judicial Review) Act applies in this situation. The technical and financial assessments undertaken for cash bidding are the same as those taken for the existing work-program bidding for exploration permits.

Turning my attention to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2013, the Australian government recently announced its intention to include cash bidding in the 2014 offshore exploration acreage release as an alternative method of exploration permit allocation in relation to mature areas or those known to contain certain petroleum accumulations. The inclusion of cash bidding as an alternative to work-program bidding is intended to prevent over-exploration where none or little may be required, while ensuring that the release of these areas continues to be equitable, economic and efficient. To enable this, Minister Macfarlane introduced some amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to optimise the existing cash-bidding system.

The National Offshore Petroleum Titles Administrator performs an important function in Australia's offshore petroleum regulatory regime through assisting and advising the joint authority and the minister, the responsible Commonwealth minister, on the award of titles as well as managing the ongoing titles administration function, including keeping a register of titles and data and information management. This bill amends the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 to allow the National Offshore Petroleum Titles Administrator to cost-recover for its annual titles administration activities in relation to cash-bid petroleum experts. We appreciate the contributions of the members opposite and we commend this bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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