Petroleum and gas exploration
Exploration laws explained
Introduction
The following contains information of a general nature
only and is intended to demystify aspects of the
petroleum and gas exploration process.
It should be read in conjunction with the Petroleum and
Gas (Production and Safety) Act 2004 and the
Petroleum Act 1923.
This information is a guide only and does not take into
account your specific situation. It is recommended that
you seek independent advice from your own legal
adviser or an independent advisor with appropriate
experience in this field.
Greater detail is available from officers of the
Department of Mines and Energy listed at the end of
this information sheet.
Definitions
ATP — means an Authority to Prospect, which is a
petroleum exploration tenure granted under either the
Petroleum and Gas (Production and Safety) Act 2004
or the Petroleum Act 1923. An ATP is sometimes
referred to as an EPP (for “exploration permit for
petroleum”).
Compensatable effect — is defined under Section
531 of the Petroleum and Gas (Production and Safety)
Act 2004 and section 79P of the Petroleum Act 1923.
In essence, it means a landowner or occupier will be
compensated if all or any of the following apply:
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deprivation suffered due to possession of the land
surface
loss of value
decrease in the use made or that may be made of
the land or any improvements to the property
severance of any part of the land
any cost or loss arising from the carrying out of
activities under the petroleum authority on the
land.
DME — Department of Mines and Energy
EPA — Environmental Protection Agency
Exploring —for petroleum or gas, means carrying out
an activity for the purpose of finding oil or petroleum,
natural gas or coal seam gas (also called coal seam
methane). Examples include—
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conducting a geochemical, geological or
geophysical survey
drilling a well
carrying out testing in relation to a well
taking a sample for chemical or other analysis.
1923 Act — means the Petroleum Act 1923.
Petroleum — under both the Petroleum and Gas
(Production and Safety) Act 2004 and the Petroleum
Act 1923 ‘petroleum’ also means oil, coal seam gas,
and natural gas.
P&G Act — means the Petroleum and Gas
(Production and Safety) Act 2004.
private land — means either freehold land; or an
interest in land less than fee simple held from the State
under another Act.
Main types of exploration
activities
Seismic acquisition
Exploring for reservoirs of petroleum (be they natural
gas which may include coal seam gas, or crude oil)
has advanced dramatically in the past 15 to 20 years,
enabling the industry to more accurately define likely
areas of petroleum deposits.
Seismic study can be conducted on lands covered by
an ATP (subject to the provisions of the P&G Act and
the 1923 Act and various other Acts). Seismic data is
acquired by transmitting sound waves into the earth
and recording, by objects called “geophones”, the
reflection of these waves off layers of rocks. It operates
like a giant ultrasound machine.
Seismic surveys are used to define and delineate likely
areas of petroleum reservoirs or seams of coal.
There are two main resources sought by petroleum
exploration companies:
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Conventional petroleum, and
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Coal seam gas.
The recorded data obtained from the geophones is
processed by computer to give an indication of the
structure of the rocks beneath the surface of the earth.
Reservoirs of conventional petroleum (oil, natural gas)
are not found in deep underground lakes. They are
found within the tiny spaces of porous rocks such as
sandstone, as deep as 3.5 to 4 kilometres below the
surface.
Seismic data is generally required along straight lines.
Minimal clearing of the site may need to be
undertaken.
Coal seams (which contain gas consisting of mostly
methane or CH4) are usually saturated with water. The
water’s hydrostatic pressure keeps the methane
attached onto the coal. To obtain the gas from the
coal, water is pumped out via a well, reducing pressure
and causing the methane to flow from the coal.
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vibroseis, involving large trucks fitted with a
vibrating plate. The plate is placed on the ground
and vibrated, giving off a source of sound waves or
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Small explosive charges, generally dynamite,
which are placed in shallow holes and fired to
produce the sound waves. Note that dynamite as a
sound source is now rarely used when explorers
wish to acquire seismic data.
The sources for sound waves are usually of two types:
Techniques used by petroleum explorers to identify
petroleum deposits include:
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in-house geological and geophysical research
acquisition of seismic data (a seismic survey)
the drilling of wells.
Drilling a well
Drilling an exploration well in the search for
conventional petroleum in deep reservoirs involves
using a series of drill bits of up to 45 centimetres
(18 inches) in diameter.
It is usual at this stage for a property to be entered for
observation to obtain a geological/geographical
overview of the land.
The drilling of a well involves a rig, along with ancillary
sheds containing geological equipment and other
instrumentation, mud pits, large amounts of casing
pipes etc. (A mud pit is an excavation, about the size
of a turkey nest dam, that holds the drilling mud
needed to lubricate the drill bit). This equipment can
occupy a site as large as three hectares.
In-house geological and geophysical
research
Accounts of all previous petroleum exploration are
contained in reports submitted to the DME. They are
available as a research tool for explorers in this costintensive process.
Explorers for coal seam gas, drill shallower wells than
those drilled for petroleum. They may use truckmounted mobile drill rigs. The areas of land that may
be accessed by explorers for coal seam gas are
significantly smaller than those required by
conventional petroleum explorers.
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However, owing to the area required by all drilling rigs
and equipment, closely settled areas including small
properties and average household blocks of land are
generally avoided by petroleum exploration
companies.
Entry to private lands
A person acting under the authority of an ATP must not
enter private land unless:
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each landowner and occupier has been given a
notice of entry 10 business days before the
proposed by the ATP holder enters the land, and a
further notice of entry two business days before
that entry, OR
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each owner and occupier of the land has agreed
that an entry notice is not required (waiver of
entry notice), OR
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the entry is needed to preserve life or property
because of a dangerous situation or
emergency. However, in this circumstance, if
practicable, the person entering the land must
notify each owner and occupier of the land verbally
before entering the land, AND
Companies or eligible individuals may apply for ATPs
in response to a call for tenders. Calls for tenders over
land within Queensland are released by the Minister
for Mines and Energy and published in the Queensland
Government Gazette.
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a compensation agreement is in place. (For
further details about compensation, please see the
heading “Compensation”, below.)
An application for an ATP must contain a minimum
compulsory proposed work program covering
authorised activities for each year of the period stated.
This period is generally four years.
Entry notice
Depending on the depth of the well being drilled and
the rock structures encountered at the drill bit, drilling
may take anything from one week to a couple of
months.
Drilling costs can be high depending on the total depth
of a well and its location in Queensland. The total
depth of a hole is dependent upon the geological
layers being tested and commonly exceeds 2,200
metres, with the deepest well in Queensland drilled to
4,440 metres.
Applying for an ATP
The entry notice, to be given to each owner and
occupier of the land, must be accompanied by the
information statement, that details the rights and
obligations of ATP holders, owners and occupiers
relating to the entry of land under an ATP.
The maximum term for which an ATP may be granted
is generally 12 years. However, the Minister may grant
an ATP for a term less than this. If the Minister grants
an ATP for a period of less than 12 years, the ATP
may be renewed at the Minister’s discretion.
The entry notice must include the following information:
ATPs are granted in blocks approximately 5 minutes of
latitude and five minutes of longitude. The DMEcreated Block Identification Maps (BIMs) use a linear
grid to cover Queensland.
The approximate area of a block is 75 square
kilometres (7,500 hectares/18,000 acres), depending
on where the block is located. The area shown on
each BIM consists of 3456 blocks, which are
individually numbered from 1 to 3456. Each BIM has a
different name linked to a geographical feature shown
on the BIM. BIMs are drawn at a scale of 1:1 000 000.
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the land proposed to be entered
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the period during which the land will be entered
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the activities proposed to be carried out on the
land
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when and where the activities are proposed to be
carried out
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contact details for:
(i) the ATP holder or
(ii) another person the ATP holder has authorised
to discuss the matters stated in the notice.
Each block is identified by combining the name of the
BIM with the number of the block (from 1 to 3456), for
example, Clermont 1645.
The entry period can not be longer than 6 months for
an ATP, unless the person to whom the notice is
required to be given agrees in writing.
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The further notice of entry must be given to each
owner and occupier and must accurately describe
where and when activities are proposed to be carried
out. This notice may be written or verbal and may be
given in any way e.g., in person, by e-mail, by letter or
by hand written note).
For example, constructing a road or track, or opening
and closing a gate.
Access rights may only apply if:
Waiver of entry notice
A waiver of entry notice may only be given in writing
and must be signed by the ATP holder. The waiver of
entry notice must state:
that the owner or occupier has been told they are
not required to agree to the waiver of entry notice
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the activities proposed to be carried out on the
land
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the period during which the land will be entered
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when and where the activities are proposed to be
carried out.
needed to preserve life or property because of a
dangerous situation or emergency or
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each owner or occupier has agreed verbally or in
writing to the access rights.
An access agreement may include a compensation
agreement in relation to the access or future access
by the ATP holder. For further details about
compensation, please see the heading below.
Each owner and occupier can agree that an entry
notice is not required.
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Note that each owner and occupier must have agreed
to the access rights where the access rights are likely
to have a permanent impact on the access land (for
example, building a road).
Also note that only the occupier must have agreed to
the access rights where the access rights are NOT
likely to have a permanent impact on the access land
(for example, opening and closing a gate).
An owner or occupier cannot refuse to make an access
agreement but can ask for reasonable and relevant
conditions to be imposed
The owner or occupier cannot withdraw the waiver of
entry notice during the period, although the waiver of
entry notice ceases to have effect at the end of the
period.
If an owner or occupier does not make an agreement
with the ATP holder on request within 20 business
days, they are considered to have refused to agree to
access. To show that access has been unreasonably
refused, the ATP holder must show:
Notice after entry
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The ATP holder must give each owner and occupier a
notice detailing the activities carried out on the land
within three months after the notice period or six
months after the waiver of the entry notice.
that it not possible or reasonable to exercise
access rights by using an formed road, then the
following must be taken into account
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If no activities were carried out on the land during the
period, the notice must state this.
the nature and extent of any impact the access
rights will have on the land and the owner or
occupier’s use and enjoyment of it; and
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how, when and where and the period during which
the ATP holder proposes to exercise the access
rights.
Access
Where access rights are refused, either party may
refer the refusal to the Land Court for a decision.
Access rights of an ATP holder
Further details about how to apply to the Land Court,
for the Land Court to determine these matters, can be
obtained from their website, www.landcourt.qld.gov.au
or by contacting the Land Court on telephone
(07) 3247 5193 during office hours.
A person acting under the authority of an ATP has
access rights to cross land if it is reasonably necessary
and to carry out activities on the land that are
reasonably necessary to allow the crossing of the land.
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owner or occupier of land that is within the ATP, for
determining compensation as a result of this owner
or occupier suffering a compensatable effect
caused by authorised activities for the ATP,
The holder of an ATP is liable to pay compensation to
each owner or occupier of land or access land that is
within the ATP, for any compensatable effect suffered
by the owner or occupier due to authorised activities
conducted under the authority of the ATP.
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owner or occupier of land that is access land for
the ATP, for determining compensation as a result
of this owner or occupier suffering a
compensatable effect caused by access to the
ATP, or
Compensation is also payable for consequential
damages the owner or occupier incurs because of a
compensatable effect caused by authorised activities
for the ATP.
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the ATP holder.
Compensation
Principles
The persons listed above may also apply to the Land
Court for the Land Court to determine a variation to
compensation
For what is a compensatable effect, please see the
Definitions heading at the start of this document.
For further details about the Land Court deciding
compensation, see sections 533 to 535 (inclusive) of
the P&G Act and sections 79R to 79T of the 1923 Act.
Compensation Agreement
Each owner or occupier of land that is within the ATP,
or is access land for the ATP, may enter into a
compensation agreement with the ATP holder.
For further details about the Land Court deciding
compensation, see sections 533 to 535 (inclusive) of
the Petroleum and Gas (Production and Safety) Act
2004 and sections 79R to 79T (inclusive) of the
Petroleum Act 1923.
The compensation agreement may be about the ATP
holder’s compensation (or future compensation)
payable to the owner or occupier of the land, and may
relate to all or part of the compensation (or future
compensation) payable by the ATP holder.
Further details about how to apply to the Land Court,
for the Land Court to determine these matters, can be
obtained from their website, www.landcourt.qld.gov.au
or by contacting the Land Court on telephone
(07) 3247 5193 during office hours.
Details of what needs to be included in a
compensation agreement, plus what must be provided
for in such an agreement, are detailed in section 532 of
the P&G Act and section 79Q of the 1923 Act.
Security moneys
Before the granting of an ATP, the EPA determines an
amount for environmental security relative to the
proposed work programme and retains this security
(called a “financial assurance”) until rehabilitation of
any well sites or seismic survey lines has occurred to
its satisfaction.
Unless a compensation agreement is in place, an ATP
holder cannot enter lands to conduct activities
authorised under the ATP. Exceptions to this rule are
detailed in section 536 of the P&G Act and section 79U
of the 1923 Act.
If, for example, a company goes into liquidation and
does not rehabilitate any disturbed lands, the EPA can
use part or all of this financial assurance to employ
contractors to rehabilitate this site. It should also be
noted that future grants of applications for ATPs
depend in part on a company’s previous performance.
Decision on compensation by Land
Court
Compensation (or future compensation) payable to the
owner or occupier of the land, or access land, by the
ATP holder, may be determined by the Land Court
upon application to the Land Court.
The DME may also require that a security be provided
by the proposed holder of an ATP, prior to the ATP
being granted. This security may be used, among
other things, to clean up drilling or seismic equipment
left on land where these type of activities occurred.
Any of the following persons may apply to the Land
Court, for the Land Court to determine compensation
(or future compensation):
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DME contact details
Further background
Department of Mines and Energy (DME)
PO Box 15216, CITY EAST QLD 4002
www.dme.qld.gov.au
The Petroleum and Gas (Production and Safety)
Act 2004 and the Petroleum Act 1923 may be viewed
Registrar, Petroleum and Gas
purchased from Goprint (the Queensland Government
printer) via the website www.goprint.qld.gov.au.
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at www.legislation.qld.gov.au or
Ms Tanya Cooney
3238 3803
Email Address: [email protected]
The Registrar, Petroleum and Gas deals with the
administration of all applications for, and granted,
petroleum authorities and tenure. Landholders with
questions as to their rights, and the rights and
responsibilities of the tenure or authority holders,
should contact this officer in the first instance.
Senior Tenure Officer
Mr John McCormack
3238 3815
Email Address: [email protected]
The Senior Tenure Officer assists the Registrar,
Petroleum and Gas, in dealing with the administration
of all applications for, and granted, petroleum
authorities and tenure. Landholders with questions as
to their rights, and the rights and responsibilities of the
tenure or authority holders, should contact this officer
where the Registrar, Petroleum and Gas is
unavailable.
Petroleum Engineer and Petroleum
Technologist
Mr Andy Kozak 3238 3739
Email Address: [email protected]
The Petroleum Engineer and Principal Technical
Assessment Officer provides technical advice to all
sectors of the petroleum industry. In addition, this
officer also assesses the technical aspects of all
petroleum authority and tenure applications, and all
dealings associated with granted petroleum authorities
and tenure.
Executive Director, Statewide Services
Mr Jim Grundy 3237 0210
Email Address: [email protected]
The Executive Director is in charge of operations for
South East Region, where all petroleum authority and
tenure applications are processed.
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