A drilling approval given to Santos was set aside after the court found that the Australian offshore regulator did not consult properly with traditional owners.

Namely, Tiwi Islanders won a case against drilling for gas by Santos in their traditional waters after complaining that the company failed to consult them about the impact of the project. Judge Mordecai Bromberg set aside approval for the drilling which is part of Santos’s $3.1 billion Barossa project.

He said Australia’s offshore oil and gas regulator NOPSEMA failed to assess whether Santos had consulted with everyone affected by the proposed drilling, as required by the law, and gave Santos two weeks to shut down and remove its rig from the sea north of Melville Island.

Santos said in a statement that the drilling activities would be suspended as a result of the decision pending either a favorable appeal outcome or the approval of a fresh Environment Plan. Santos will be seeking to expedite these processes.

“This is a disappointing outcome. Consistent with previous practice, Santos engaged about the proposed drilling activities with the Tiwi Land Council, a representative body with statutory authority {…}. Similarly, Santos had engaged about the proposed drilling activities with the Northern Land Council, the Native Title representative body for the Tiwi Islands. NOPSEMA had accepted our efforts to consult with Tiwi Islanders in accordance with the Regulations when it decided to accept the Environment Plan for those activities.”

“Given the significance of this decision to us, our international joint venture partners and customers, and the industry more broadly, we consider that it should be reviewed by the Full Federal Court on appeal. Santos is committed to continuous improvement in our consultation processes. Our relationships with the Traditional Owners, local communities, and landholders where we operate are very important to us.”

“Barossa is an important gas project for the nation, enhancing jobs, exports, and our relationships with investors and gas customers in Asia who have depended on Australia for their energy security for decades. The Barossa Gas Project is approximately 46 percent complete. The drilling activities are not on the critical path for the project, and we have headroom in the project cost contingency.”

“Santos appreciates the strong support from our Japanese and Korean joint venture partners, who have, in good faith, and on the back of Australia’s historical reputation as a safe and stable investment destination, invested in this project. Project approval uncertainty is a public policy issue that should be urgently addressed by Australian governments to reduce the risk for trade and investment in projects around the country,” Santos claimed in the statement.

To contact the author, email bojan.lepic@rigzone.com