Senate approves offshore oil regulator

A single national regulator will be established for the offshore oil and gas industry, after a legislative package was passed in the Senate last night. However WA's Mines and Petroleum Minister Norman Moore remains critical, saying he has doubts about the ability of the federal government to do the job.

The legislation provides for the establishment of two bodies: a statutory authority called the the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), which will be headquartered in Perth, and a government agency called the National Offshore Petroleum Titles Administrator (NOPTA).

The new bodies will have responsibility for all waters around Australia, except for 'state' waters off the Western Australian coast, which will remain under state government control. The 'state' waters are typically in the area three nautical miles off the coast, or around islands.

The Productivity Commission recommended the new bodies be set up, following the release of the Australian government's Montara Commission of Inquiry into the 74-day oil and gas spill in the Timor Sea, off the northern coast of Western Australia, in 2009.

During the spill, oil, gas and condensate leaked from a wellhead at the Montara oilfield platform, owned by Thai-based company PTTEP Australasia, for more than two months before it was plugged.

"With the Senate tonight passing the legislative package that establishes a single national regulator for offshore petroleum activities, the Government has achieved the single most important milestone in its reform agenda for improving safety in the offshore petroleum industry," Resources Minister Martin Ferguson said in a statement on Wednesday.

“I thank the Western Australian Government and Minister Moore in particular for working constructively with the Commonwealth to reach an outcome acceptable to all parties.”

However Mr Moore continues to have serious reservations, espcially with the federal government aiming to establish the new bodies by 1 January next year.

"I have serious concerns about whether they have the expertise or capacity," he told WA Business News.

Up to now, Commonwealth waters off the WA coast have been jointly regulated by the relevant state and federal minister, though most of the work has been undertaken by the state department.

"I would anticipate they would try to start poaching state people," Mr Moore said.

Mr Moore said a memorandum of understanding had been signed, dealing with how the state and federal governments "might cooperate on the approvals process" for projects - such as an LNG development that has a pipeline running to the shore - that operate in state and Commonwealth waters. He acknowledged that this adds potential complexity to the approvals process.

He emphasised that the federal government will have full responsibility if there is another incident like Montara.

"One of the few agreements I was able to get out of them was that they inform us if there is an incident."