Costs for removing infrastructure could be laid at the feet of those who sold it or other ‘persons'. The latter is a broad definition.
Some of the new regulations will be backdated to the beginning of this year, but not to 2015 as One Nation senator Pauline Hanson was hoping in an amendment she earlier filed.
The Bill opened for comment in April and has been read three times in the lower and three times in the Senate. It passed without serious amendment.
Titleholders are going to find it harder to permanently walk away from rust buckets, or offload them to minnow single asset companies, and the powers of both offshore regulators -- titles and environment and safety -- have been beefed up.
Minister for natural resources Keith Pitt, whose office oversees all exploration and production in Commonwealth waters, has said since early this year there would be a strengthening of trailing liabilities, increased oversight of changes in company control, and increased requirements for financial assurance.
All three of these could have prevented the Northern Oil and Gas Australia debacle by ensuring the single asset company could never take over Talisman Petroleum, which held a 40% stake in the Coralina Laminara fields in the Timor Sea and the Woodside Petroleum-operated Northern Endeavour FPSO.
When it went into liquidation the Commonwealth was forced to take over the vessel, but Canberra was always clear tax payers would not foot the clean up bill. This could be up to A$1 billion while a recent report suggests $52 billion in coming decades with half of that by 2030.
The Bill was structured around recommendations from the Walker Review, undertaken after the single asset company went into liquidation. North Sea expert Steve Walker was clear that trailing liabilities were key.
The Walker report contained nine recommendations which also included a recommendation on an environmental and safety regulator reviewing practices so it could better identify underlying issues.
Walker said "it is essential that current titleholders continue to have prime liability for decommissioning".
The National Offshore Petroleum Titles Administrator had " to work under a number of legislative limitations which it considered prevented it from being able to fully consider, and influence, the ramifications of the change of titleholder," he found.
The Bill does not just give the safety and environmental regulator power but also closes the loophole big enough to fit a rusty FPSO: the titles regulator now has more power to scrutinise titles transfers, to ensure whoever ends with permit has the funds for its upkeep and ultimate decommissioning.
The National Offshore Petroleum Title Administrator will be able to demand more information to evaluate the capacity of the recipient and overall fitness to operate under Australia's offshore regime
This will however be interesting for Woodside, slated to take all of BHP's assets including those legacy ones in the Bass Strait. In addition to trailing liabilities it will "provide for oversight and scrutiny of transactions involving a change of control of a petroleum or greenhouse gas titleholder, through a merger or takeover".
Last week Woodside proposed to acquire BHP's entire petroleum portfolio via an all-scrip merger, doubling the size of the company and its production, but giving it a large end of life bill for the Victorian assets.
Now NOPTA will be able to run a ruler over the deal to make sure the company whose original, legal transaction set off a chain of events that led to its increased powers can actually complete the biggest deal in recent history in the sector.
