Court overturns Morrison’s gas permit refusal

Perth-based Asset Energy has succeeded in its Federal Court challenge to former prime minister Scott Morrison’s 2021 decision to block an exploration permit in the Sydney Basin.

The federal Petroleum Exploration Permit 11 (PEP-11) covers more than 8,200 square kilometres off the NSW coast, between Newcastle and Wollongong.

Bounty Oil & Gas NL and North Perth gas explorer Asset Energy are joint venture partners in gas exploration in the offshore Sydney Basin under PEP-11, with Bounty holding 15 per cent interest.

In December 2021, the National Offshore Petroleum Titles Administrator told Asset Energy the joint venture’s application to extend the PEP-11 would not be renewed, with Mr Morrison issuing a media release on putting a stop to the permit on the same day.

In a judgment delivered today, Federal Court Justice Darren Jackson found Mr Morrison’s decision was affected by apprehended bias, taking into account public comments he made against PEP-11 in the lead up to the decision to refuse Asset Energy's application.

Justice Jackson ordered the refusal be quashed and for Asset Energy’s PEP-11 application to be redetermined by the Commonwealth-NSW Offshore Petroleum Joint Authority.

According to the judgment, finding apprehended bias is based on a legal test that a fair-minded observer might find that the decision-maker did not bring an impartial and unprejudiced mind in their resolution.

Mr Morrison made public statements to the press over not supporting an extension of the PEP-11 throughout 2021, prior to Asset Energy being notified its extension application would be refused, the judgment says.

The joint authority, of which Mr Morrison is a part, confirmed and signed off on the refusal in March 2022.

“The first time Mr Morrison formally indicated his position on the application was when he annotated and signed the memorandum of recommendations on 14 December 2021,” Justice Jackson said in his decision.

“It can be inferred from attachments that accompanied that memorandum that it was not given to him until 10 December 2021 at the earliest.

“So there is no reason to think that his public comments before that time were the product of having reached a decision after deliberating on the application and relevant supporting material.

“In this case, Mr Morrison's public comments might lead a fair-minded observer to reasonably apprehend that when he did come to deliberate on the matter, sometime between 10 and 14 December 2021, his mind might have been closed to persuasion.”

Asset Energy is a subsidiary of Advent Energy, in which BPH Energy holds a 36.1 per cent direct interest.

BPH Energy released a statement to the ASX following the judgment, announcing that the joint venture was fully in compliance with the contractual terms of PEP-11.

“In light of the decision of the Federal Court of Australia, the PEP-11 joint venture sincerely hopes that the relevant applications can be reconsidered in a timely manner and according to law by the ministers now comprising the joint authority,” BPH Energy chairman David Breeze said.

Advent Energy is an unlisted oil and gas exploration company held by BPH Energy, Grandbridge and MEC Resources.

Ministerial appointments

The PEP-11 has been at the centre of policy discussions, with Independent MP Zali Steggall introducing a parliamentary bill to end the permit in 2021.

Asset Energy lodged a Federal Court application in June, naming the minister for regional NSW and the prime minister, in their capacities as respective ministers of the Commonwealth-New South Wales Offshore Petroleum Joint Authority, as respondents.

The legal matter was affected by the revelation that Mr Morrison appointed himself to five ministerial portfolios without informing his cabinet or the public.

BPH Energy announced on the ASX in August that it was undertaking a full review of its options following the news of an inquiry into the secret ministerial appointments, which included Mr Morrison being appointed as industry, science, energy and resources ministers at the time of the PEP-11 decision.

However, Justice Jackson decided it was not necessary to find out whether the ministerial appointment was valid to review the refusal.

“If valid and effective, it would have empowered Mr Morrison to administer the (Offshore Petroleum and Greenhouse Gas Storage) Act and to make a decision on Asset Energy's application as part of the joint authority,” he said in his decision.

“I will proceed on the assumption that the appointment of Mr Morrison as a minister administering the department was valid. 

“Also, while the Joint memorandum refers to the purported appointment in connection with the allegations of apprehended bias, as will be seen Mr Morrison's public comments provide sufficient basis for the orders sought without having to rely on the appointment.”