All petroleum exploration and production activity in NSW must be conducted in accordance with a petroleum title issued under the Petroleum (Onshore) Act 1991.

Certain exploration and production activities also trigger the requirement for additional approvals and other NSW legislation may also apply.

The Petroleum (Onshore) Act 1991 provides mechanism for Government to regulate exploration and production by granting titles.

The petroleum title gives holders exclusive rights to explore for, or produce petroleum (including conventional and coal seam gas) within the title area.

Types of titles

Petroleum special prospecting authorities

A petroleum special prospecting authority gives the holder the exclusive right to conduct desktop surveys using existing research or other low-impact scientific investigations to determine the occurrence of petroleum over the designated area.

Petroleum exploration licences

A petroleum exploration licence gives the holder the exclusive right to explore for petroleum (including conventional and coal seam gas) within the exploration licence area, during the term of the licence.

The purpose of exploration is to locate areas where resources may be present and establish the quality and quantity of those resources. Next comes establishing the viability of extracting the resource.

Granting an exploration licence does not carry entitlement for production, nor does it guarantee a production lease will be granted within the exploration licence area.

Petroleum assessment leases

A petroleum assessment lease caters for situations between exploration and production.

The lease allows the holder to maintain a title over a potential project area, without having to commit to further exploration.

The holder can, however, continue exploration to further assess the viability of commercial production.

An assessment lease may be appropriate where:

  • a resource has been proven and the feasibility of production established but the project is not currently viable, although it has potential to be developed in the foreseeable future; or
  • there are areas of potential which are natural extensions to existing operations or projects, but it is currently impractical to apply for a production lease.

Petroleum production leases

A petroleum production lease gives the holder the exclusive right to extract petroleum within the production lease area during the term of the lease.

Since all petroleum production is State Significant Development, development consent under the Environmental Planning and Assessment Act 1979 must be in place before a petroleum production lease can be granted.

Completing and lodging applications

Applications for petroleum titles must be completed in the specified form and manner, and include all required information. The prescribed fees must be paid at the time of initial lodgement.

Applications are processed in the order in which they are received, against the assessment criteria.

Under the Petroleum (Onshore) Act 1991, conflicting applications over all or part of the same area are assessed in priority order of lodgement, after taking into consideration the provisions of the Act and Regulations.

Decision making process

NSW Department of Industry, Resources & Energy assesses all applications in accordance with the Petroleum (Onshore) Act and recommends approval, renewal or refusal.

The decision maker's reasons for their decisions are documented.

To ensure maximum development of NSW's mineral potential it is essential that exploration and production approved under titles proceed efficiently.