BPH Energy claims PEP-11 gas exploration permit unaffected by NSW offshore ban

BPH Energy (ASX: BPH) believes the New South Wales government’s new bill banning offshore oil developments may not cover the PEP-11 permit operated by its investee company Advent Energy.

Late last week, the government successfully passed a new bill through NSW parliament that would ban offshore oil and gas and mining activities off its coastline.

However, BPH, which holds a 36% interest in the unlisted Advent Energy, is now questioning whether the state government has the legal rights to decide on activities in waters that come under Commonwealth jurisdiction.

Permit in Commonwealth waters

BPH believes the state of NSW and its government only have jurisdiction over and the power to control exploration and extraction in coastal waters up to 3 nautical miles (4.83 kilometres) offshore from the NSW coast.

It notes that PEP-11 is beyond that limit and therefore all such matters regarding the permit are under the jurisdiction of the Commonwealth of Australia.

It also pointed out that gas exploration operations in the area including safety and environment are controlled by Australian government authority NOPSEMA.

BPH said permit operator Advent and its joint venture (JV) partner Bounty Oil & Gas (ASX: BUY) would consider challenging the validity of the bill under section 109 of the Commonwealth Constitution if the legislation is enacted.

Exploration plans proceeding

In the meantime, Advent and Bounty intend to pursue gas exploration by drilling around 26km offshore—well beyond the limit of NSW coastal waters.

At the same time, Advent and Bounty are waiting on a ruling on extension and variation applications for the PEP-11 permit to allow them to drill the Seablue-1 gas well on the large Baleen prospect.

BPH executive director David Breeze said that while the various applications involving PEP-11 are being considered, Asset Energy is continuing to investigate the availability of a mobile offshore drilling unit and is in communication with drilling contractors and other operators who have recently contracted similar rigs.

BPH also stated that PEP-11 continues in force under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the JV is in compliance with the contractual terms of the project with respect to such matters as reporting, payment of rents and various other provisions under the act.