Australia Court Ruling on Santos Raises Risks for Offshore Gas Projects

Sonali Paul
Friday, December 2, 2022

Australia's Federal Court rejected on Friday an appeal by Santos Ltd to resume drilling on its $3.6 billion Barossa gas project off northern Australia after indigenous groups raised objections, potentially delaying other offshore projects.

Three Federal Court judges ruled that Santos had not consulted all the indigenous people on the Tiwi Islands that should have been consulted for its environmental plan, backing a challenge brought by a member of the Munupi clan.

The court's decision means all offshore developers will have to consult a wide range of groups, including those with cultural interests, when seeking regulatory approvals, which could slow projects in the works such as Woodside Energy Group's $12 billion Scarborough gas development and linked Pluto LNG plant expansion.

"There is now the risk of more delays and obstacles in the progression of important energy projects," Australian Petroleum Production and Exploration Association Chief Executive Samantha McCulloch said in a statement.

The court's ruling hit the companies' shares. Santos closed down 3.8%, and Woodside ended 2.6% lower in a broader market that fell just 0.7%.

Santos on Friday said it would apply for fresh approvals for its biggest project in line with the court's order.

"Santos does not anticipate any material cost or schedule impact, and first gas from the Barossa Gas Project remains on track to be delivered in the first half of 2025," the company said in a statement.

The court backed a challenge led by Munupi clan member Dennis Tipakalippa, who contended that the Barossa project posed a risk to sacred sites and spiritual connection to Sea Country north of the Tiwi Islands in the Timor Sea.

"Our sea is like our mother - we are part of the sea and the sea is part of us. Santos and every other gas company must take note that this is our country and we must be consulted," Tipakalippa said in a statement after the court handed down its decision.

The Barossa gas field is about 140 km north of the Tiwi Islands.

Santos had to suspend drilling on the project in September after a judge found that the environmental approval by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for the Barossa permit was invalid as it had not properly consulted the Munupi clan about the project.

Tipakalippa's lawyer told the court Santos should have gone beyond the Tiwi Land Council to talk to people who had a specific interest in Sea Country, just as Santos had talked to groups that had fishing and tourist interests.

Santos said it had consulted all the relevant persons who might be affected by its drilling and that it would be too hard to consult all indigenous groups with connections to the area.

But in their decision, the three Federal Court judges concluded: "In this case, we consider it clear that Mr Tipakalippa and the Munupi clan had interests ... that required them to be consulted."

Credit Suisse analyst Saul Kavonic said the court's decision "may cause a material delay to Barossa, as a new consultation process is undertaken and a new environmental plan is submitted and assessed by NOPSEMA".

A lawyer at the Environmental Defenders Office, Alina Leikin, said her Tiwi Island clients including Tipakalippa do not want drilling in the Timor Sea, but that would be a matter for the consultation process.

"The community are hopeful that the regulator and Santos will understand and appreciate the depth of their concern and their desire to protect their Sea Country and won't go ahead with this drilling," Leikin told Reuters by phone from the Tiwi Islands.


(Reuters - Reporting by Sonali Paul; Editing by Muralikumar Anantharaman and Edmund Klamann)


Categories: Energy Drilling Industry News Activity Production Australia/NZ

Related Stories

Sunda Energy Gets Chuditch License Extension After Termination Warning

Seascape Energy Expands Temaris Gas Acreage Offshore Malaysia

Seadrill Secures Offshore Drilling Deals Across Four Countries

Oil Caught Between Trump's Russia Supply Push and Middle East Risks

Eni Agrees Indonesian Gas Asset Sales to Pertamina and Medco

Valeura Starts Wassana Platform Installation Offshore Thailand

Solstad Maritime Secures APAC Drilling Support Work for AHTS Pair

Eni and Petronas JV Extend Drilling Backlog for Ventura Offshore’s Semi-Sub Rig

Indonesia Picks Winners for Six Oil and Gas Blocks, Puts Eight More on Offer

Vantris Energy Secures Petronas’ Offshore Drilling Work Orders

Current News

Sunda Energy Gets Chuditch License Extension After Termination Warning

Finder Energy Selects Eneos’ Rig for Drilling Job off Timor-Leste

Inpex-Led Bonaparte CCS Project Gets Australian Offshore Storage Approval

Seascape Energy Expands Temaris Gas Acreage Offshore Malaysia

Oil Markets Brace for Years of High Prices as Iran War Drags On

Seadrill Secures Offshore Drilling Deals Across Four Countries

Jack-Up Rig Arrives in Indonesia for Conrad Asia Energy's MOPU Conversion

Murphy Oil Finds More Oil Offshore Vietnam, Côte d'Ivoire

Oil Caught Between Trump's Russia Supply Push and Middle East Risks

Eni Agrees Indonesian Gas Asset Sales to Pertamina and Medco

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com