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Parliamentary Questions


Question On Notice No. 3226 asked in the Legislative Council on 22 September 2020 by Hon Robin Chapple

Question Directed to the: Minister for Regional Development representing the Minister for Mines and Petroleum
Parliament: 40 Session: 1


Question

I refer to New Standard Energy (NSE) and their failure to rehabilitate six petroleum wells (four drilled; two not drilled) in the Canning Basin, despite formal directions from the Department of Mining, Industry Regulation and Safety (DMIRS), leaving considerable liability to the Western Australian taxpayers, and I ask:
(a) in light of the failure of DMIRS to ensure NSE was financially able and legally obliged to properly close and rehabilitate four petroleum wells drilled in the Canning Basin, south east of Broome: Gibb-Maitland-1, Nicolay-1, Lanagan-1, Lawford-1, and Lawford 1 Deepening, will the Minister guarantee that other would-be Canning Basin explorers, such as Black Mountain, Bennett Resources Pty Ltd and Theia Pty Ltd, will be required to place a security bond in cash with DMIRS that is sufficient enough to cover the full costs of closure and rehabilitation for each proposed well, prior to any drilling commencing:
(i) if no to (a), why not;
(b) given that NSE has changed its company name several times, what was the company name at the time of drilling and completing each of the wells: Gibb-Maitland-1, Nicolay-1, Lanagan-1, Lawford-1, and Lawford 1 Deepening;
(c) is the Minister aware that NSE was in a joint venture partnership with ConocoPhillips from September 2011 and at the time of drilling two of its Canning Basin wells;
(d) is the Minister aware that NSE was in a financial arrangement with PetroChina from July 2013, valued at tens of millions of dollars;
(e) has the Minister or DMIRS pursued either ConocoPhillips or PetroChina, each with billions of dollars in annual income, and requested their help cover NSE's liabilities in relation to the four unrehabilitated wells in the Canning Basin:
(i) if yes to (e), what was the result of the request; and
(ii) if no to (e), why not;
(f) has DMIRS provided the Minister with a comprehensive risk and financial liability analysis for all the onshore petroleum wells currently located in the Kimberley and Canning Basin regions, including the 27 wells that are currently listed by the Department as being the legal responsibility of Buru Pty Ltd:
(i) if yes to (f), will the Minister provide a copy of the analysis; and
(ii) if no to (f), why not;
(g) if such an analysis, referred to in (f), does not exist, why not, given DMIRS's disastrous experience with NSE;
(h) will the Minister refuse to provide any future exploration or production licenses to any oil or gas company that has previously failed to cover the full costs of rehabilitation of wells for which they are wholly or partially responsible:
(i) if no to (h), why not; and
(i) for the purposes of the regulatory role of DMIRS, what legal involvement and responsibilities does Buru Energy have in relation to NSE?

Answered on 22 October 2020

(a) I refer the Member to the Financial Assurance Position Paper, released in September. The paper can be accessed on the Hydraulic Fracture Stimulation Implementation website, hydraulicfracturing.wa.gov.au.

(i) The Department of Mines, Industry Regulation and Safety (DMIRS) does not have powers to require a security bond.

(b) New Standard Exploration Pty Ltd drilled Lawford-1 and Lanagan-1. Gibb Maitland-1 and Nicolay-1 were drilled by New Standard Onshore Pty Ltd. Buru Energy Ltd deepened the Lawford-1 well, however New Standard Onshore Pty Ltd became the sole title holder of the exploration permit covering the site post deepening operations.

(c) I am advised that New Standard Onshore Pty Ltd had a commercial relationship with ConocoPhillips (Canning Basin) Pty Ltd from 2011.

(d) I am advised that New Standard Onshore Pty Ltd had a commercial relationship with Petrochina International Investment (Australia) Pty Ltd from 2013.

(e) (i)-(ii) New Standard Onshore Pty Ltd is a wholly owned subsidiary of New Standard Energy Pty Ltd and is responsible for the rehabilitation of its sites. DMIRS has been dealing directly with New Standard Onshore Pty Ltd to ensure that rehabilitation is adequately completed.

(f) (i)-(ii) I have not been provided with such an analysis. DMIRS, through its compliance planning program, undertakes risks assessments and compliance monitoring in accordance with the risk profiles of sites. This is the normal business activity of DMIRS as a regulator for this sector.

(g) See answer (f).

(h) The Minister may consider a company’s compliance history in awarding resource tenure. The decisions on any specific application will need to take into account the particular circumstances at the time and done in accordance with the relevant legislation.

(i) Not applicable.

(i) Buru Energy Ltd and New Standard Onshore Pty Ltd jointly held the title EP 417 prior to 17 October 2014, after which New Standard Onshore Pty Ltd were the sole title holder.