Land Access Agreements for Petroleum Exploration in the Northern Territory: the Tanumbirini Station and Beetaloo Station Decisions

Bradly Torgan
BA (Duke), MRP (UNC), JD (UNC), MEL (Syd)
Special Counsel, Ward Keller, Darwin NT

The Tanumbirini Station and Beetaloo Station decisions, first before the Northern Territory Civil and Administrative Tribunal and then on appeal to the Northern Territory Supreme Court, represent the first decisions under the land access agreement provisions of the Petroleum Regulations 2020 (NT). They establish jurisdictional boundaries under which the Tribunal can determine an access agreement, guidance on when the Tribunal will exercise its discretion to do so, and guidance on the terms of an access agreement. The decisions also provide a cautionary tale to landowners demanding compensation prospectively for anything other than the drilling of a well. The parties may agree to comprehensive prospective compensation in principle, but if negotiations fail and the matter goes to litigation the landowner stands to get nothing beyond compensation for the drilling of a well.

1. Introduction

The Petroleum Regulations 2020 (NT) (the Regulations) came into force on 1 January 2021. Amongst the changes from the Petroleum Regulations 1994 (NT) that the Regulations replaced was the requirement for a land access agreement (access agreement) to undertake exploration activities:[i] a petroleum interest holder could no longer commence regulated operations on a particular area of land without having an access agreement in place with the landowner or occupier of the land holding a registered interest, referred to in the Regulations as the designated person.[ii] In the Northern Territory, the designated person is typically a pastoral lessee under the Pastoral Land Act 1992 (NT). While the Petroleum Act 1984 (NT) (the Act) provides for compensation to pastoralists or other owner/occupiers for any damages or deprivation of use of the land caused by the interest holder,[iii] access agreement guidelines prior to the Regulations had no force of law.

The requirement that an access agreement be in place prior to exploration commencing arose from a recommendation of the 2018 Final Report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory (Fracking Inquiry),[iv] which the Northern Territory government had commissioned and whose recommendations it promised to implement in lifting a moratorium on hydraulic fracturing that had been in place since 2016. The recommendation was designed to level what was seen as an unequal negotiating structure between pastoralists and petroleum companies that disadvantaged the pastoralists. The enactment of the access agreement provisions brought the Territory more into line with other jurisdictions for which agreements are required before most petroleum exploration activities can occur.[v]

The Regulations contain twenty-five standard minimum protections (SMPs) that every access agreement is required to address.[vi] They include the minimum amount of compensation payable for the drilling of a well on the land,[vii] sometimes referred to as SMP 12, and a statement of whether it is anticipated that any of the exploration and related activities carried out on the land will lead to a decrease in market value of the land. If that question is answered in the affirmative, the agreement must provide a preliminary assessment of the amount of the decrease.[viii] This statement and assessment is sometimes referred to as SMP 13. What the SMPs do not mandate, however, is determinations of prospective compensation payable for anything other than a minimum amount for the drilling of a well.

The Regulations provide a multi-step negotiations process, including alternative dispute resolution.[ix] If negotiations fail, the interest holder can apply to the Northern Territory Civil and Administrative Tribunal (Tribunal) for determination of an access agreement.[x] Judicial review by the Northern Territory Supreme Court may be sought on questions of law for any Tribunal decision determining or refusing to determine an access agreement.[xi]

While most access agreements in the Northern Territory are the result of successful negotiations between the interest holder and the designated person, negotiations in two instances failed, with the interest holder seeking and securing determinations of access agreements by the Tribunal. The decisions in access agreement disputes before the Tribunal, Sweetpea Petroleum Pty Ltd v Rallen Australia Pty Ltd (Tanumbirini)[xii] and Sweetpea Petroleum Pty Ltd v Yarabala Pty Ltd & BB Barkly Pty Ltd (Beetaloo),[xiii] dated 7 February 2022, addressed access over two adjacent pastoral leaseholds in the gas rich Beetaloo sub-basin, Tanumbirini Station and Beetaloo Station. The decisions were similar, but consequential orders in Tanumbirini resulted in the determination of an access agreement over Tanumbirini Station,[xiv] while the decision in Beetaloo remained interlocutory. The Tanumbirini determination was upheld by the Northern Territory Supreme Court in Rallen Australia Pty Ltd v Sweetpea Petroleum Pty Ltd (Tanumbirini Appeal),[xv] issued on 20 April 2023. A ruling upholding the Beetaloo decision, Yarabala Pty Ltd and BB Barkly Pty Ltd v Sweetpea Petroleum Pty Ltd (Beetaloo Appeal),[xvi] followed on 9 June 2023.

This article first analyses the Tanumbirini decision because of the similarities between it and the Beetaloo decision, although differences between the two are noted, before turning to the Tanumbirini Appeal. The article then reviews major differences between the Tanumbirini Appeal and Beetaloo Appeal before discussing the impacts of the decisions.