❓ A WA parliamentary question on notice addresses potential breaches of petroleum exploration licence conditions by Rey Resources Ltd in the Kimberley region, seeking information on actions taken by the Minister and the Department, costs of rectification, and compliance with work commitments. The Minister's response indicates ongoing assessment and consideration of enforcement options.
AnsweredQoN 2030Legislative Council
QuestionView source ↗
I refer to the inspection report prepared by Department of Mines, Industry Regulation and Safety (DMIRS), now the Department of Energy, Mines, Industry Regulation and Safety (DEMIRS), officers titled West Kora-1 well site, West Kora tank farm, Point Torment-1 well site, Stokes Bay-1 well site Petroleum and Environmental Compliance Inspection Report , dated 6 September 2021, which identified approximately 44 potential breaches of petroleum exploration licence conditions by Rey Resources Ltd, or its subsidiary Gulliver Productions, in the King Sound region of the Kimberley, and I also note the Minister’s predecessor's answers to question on notice 1374, and I ask: (a) has the Minister issued any of the nine recommended direction notices set out in the inspection report to Rey Resources Ltd or Gulliver Productions: (i) if yes to (a), when did this occur; and (ii) if no to (a), why not; (b) has any action been taken by the Minister or the Department to ensure the identified breaches or non-compliances set out in the inspection report are rectified by the company: (i) if yes to (b), what action/s; and (ii) if no to (b), why not; (c) what is the estimated cost of rectifying the 44 breaches or non-compliances identified in the inspection report; (d) does the company have the funds to cover the cost of rectifying these breaches or non-compliances: (i) if no to (d), what will the Government do to ensure the public is not left to cover the cost of rectifying them; (e) will the Minister or the Department prosecute the company for its continuing failure to comply with its licence conditions: (i) if no to (e), why not; (f) for each of the company’s petroleum tenements in the Kimberley (Production Licence L15, Retention Lease R1, EP487, EP104) what are the required annual work commitments; (g) for each of the tenements referred to in (f), and for each of the past five years, is Rey Resources Ltd or its subsidiary, Gulliver Productions, compliant with those work commitments; (h) if Rey Resources Ltd, or its subsidiary, is not compliant with its annual tenement work commitments, what action has the Department taken in each instance to ensure compliance; (i) in reference to (h), if no action has been taken, why not; (j) if a company is in breach of licence conditions and work commitments across multiple years and ignores repeated departmental compliance requests or directions, at what point does the Minister use his or her powers to: (i) prosecute the company; and (ii) cancel the company’s tenements; (k) given that Rey Resources Ltd’s ongoing non-compliances and potential financial difficulties follow similar patterns with at least two other onshore petroleum exploration companies in the Kimberley, New Standard Energy and Onshore/Advent Energy, at what point will the Minister accept the advice of the WA Scientific Inquiry into Hydraulic Fracturing and establish a pooled industry rehabilitation fund to cover the decommissioning and rehabilitation costs of onshore gas exploration, and protect the public and environment from the costs and impacts of poorly regulated onshore gas companies; (l) what is the Department’s latest estimate of the cumulative costs in relation to the decommissioning and rehabilitation of the multiple petroleum exploration sites in the Kimberley operated by New Standard Energy, Onshore/Advent Energy and Rey Resources/Gulliver Productions; (m) why are companies like Rey Resources, Advent/Onshore Energy and New Standard Energy able to be non-compliant for years without any effective action being taken by the Department that is supposed to regulate the activities of those companies; (n) how many of the six recommendations of the recent Auditor General’s report (Report 11, 20 December 2022) on DEMIRS’ and DWER’s regulatory performance have been fully implemented by DEMIRS; and (o) in reference to (n), if any have not been fully implemented, why not?
AnswerView source ↗
Answered
11 June 2024
Responded by
Leader of the House representing the Minister for Mines and Petroleum
Response time
12 days
(a) No.
(i) Not applicable.
(ii) On 6 September 2021, a Notice of Intent to Direct was issued to Gulliver Productions Ltd, the registered title holder. Given uncertainty associated with well liability, together with the title holder’s response to the Notice of Intent to Direct, formal Directions were not pursued.
(b) Yes.
(i) The Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) required the title holder to submit an independent report detailing well integrity and confirmation of actions taken by the title holder to address the environmental non-compliances on the sites.
(ii) Not applicable.
(c) There is no current available estimate for those costs.
(d) DEMIRS is unable to determine this as there is no current cost estimate available.
(e) DEMIRS is still actively considering enforcement options for the remediation of the sites within L15 and R 1.
(f) L 15 has no work commitments. Refer to below table for required work commitments for R 1; EP 487; and EP 104.
Work Commitments for R 1
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
3/08/2022
2/08/2023
Geological and Geophysical Studies
$380,000.00
Studies
$0.00
2
3/08/2023
2/08/2024
Production Test
$2,550,000.00
Appraisal Well
$0.00
Geological and Geophysical Studies
$0.00
3
3/08/2024
2/08/2025
Commercial Studies
$250,000.00
4
3/08/2025
2/08/2026
Field Development Studies
$50,000.00
5
3/08/2026
2/08/2027
Appraisal Well
$7,000,000.00
Work Commitments for EP 487
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
14/03/2014
13/12/2015
140 km 2D Seismic Reprocessing
$1,010,000.00
2
14/12/2015
13/12/2024
3D Seismic Survey
$6,500,000.00
60 km 2D Seismic Survey
$0.00
Studies
$0.00
3
14/12/2024
13/12/2025
3D Seismic Processing
$1,000,000.00
4
14/12/2025
13/12/2026
Well Planning
$1,000,000.00
5
14/12/2026
13/12/2027
One (1) Exploration Well
$12,500,000.00
6
14/12/2027
13/12/2028
One (1) Exploration Well
$1,500,000.00
Work Commitments for EP 104
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
05/04/2023
04/04/2024
Seismic Reprocessing
$250,000
2
05/04/2024
04/04/2025
Geological Studies
$600,000
3
05/04/2025
04/04/2026
3D Seismic Survey
$400,000
4
05/04/2026
04/04/2027
3D Seismic Interpretation
$1,000,000
5
05/04/2027
04/04/2028
Exploration Well
$18,000,000
(g) Production Licence L 15 – Not applicable.
R 1 – Compliant with current work commitments.
EP 487 Compliant with current work commitments.
EP 104 – Compliance with current work commitment under assessment.
(h) Not applicable.
(i) Not applicable.
(j) (i) Any decision to prosecute will be guided by the State Government’s Statement of Prosecution Policy and Guidelines.
(ii) Cancellation of a title is considered a last resort. Prioritisation of remediation activities by the relevant parties is preferred.
(k) DEMIRS is currently considering several options for financial assurance, not excluding establishing a pooled industry rehabilitation fund.
(l) There is no current available estimate for those costs.
(m) DEMIRS is progressing available compliance actions.
(n) Four of the recommendations have been completely implemented.
(o) One recommendation to be implemented is progressing via the implementation of a new framework for mining environmental approvals. For the other recommendation relating to publicising operator non-compliance DEMIRS is still considering a framework for publicly releasing information on operator non-compliance and will document the outcomes of it’s consideration in July 2024.
(i) Not applicable.
(ii) On 6 September 2021, a Notice of Intent to Direct was issued to Gulliver Productions Ltd, the registered title holder. Given uncertainty associated with well liability, together with the title holder’s response to the Notice of Intent to Direct, formal Directions were not pursued.
(b) Yes.
(i) The Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) required the title holder to submit an independent report detailing well integrity and confirmation of actions taken by the title holder to address the environmental non-compliances on the sites.
(ii) Not applicable.
(c) There is no current available estimate for those costs.
(d) DEMIRS is unable to determine this as there is no current cost estimate available.
(e) DEMIRS is still actively considering enforcement options for the remediation of the sites within L15 and R 1.
(f) L 15 has no work commitments. Refer to below table for required work commitments for R 1; EP 487; and EP 104.
Work Commitments for R 1
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
3/08/2022
2/08/2023
Geological and Geophysical Studies
$380,000.00
Studies
$0.00
2
3/08/2023
2/08/2024
Production Test
$2,550,000.00
Appraisal Well
$0.00
Geological and Geophysical Studies
$0.00
3
3/08/2024
2/08/2025
Commercial Studies
$250,000.00
4
3/08/2025
2/08/2026
Field Development Studies
$50,000.00
5
3/08/2026
2/08/2027
Appraisal Well
$7,000,000.00
Work Commitments for EP 487
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
14/03/2014
13/12/2015
140 km 2D Seismic Reprocessing
$1,010,000.00
2
14/12/2015
13/12/2024
3D Seismic Survey
$6,500,000.00
60 km 2D Seismic Survey
$0.00
Studies
$0.00
3
14/12/2024
13/12/2025
3D Seismic Processing
$1,000,000.00
4
14/12/2025
13/12/2026
Well Planning
$1,000,000.00
5
14/12/2026
13/12/2027
One (1) Exploration Well
$12,500,000.00
6
14/12/2027
13/12/2028
One (1) Exploration Well
$1,500,000.00
Work Commitments for EP 104
Title Year
Title Year Start
Title Year End
Activity Type
Expenditure
1
05/04/2023
04/04/2024
Seismic Reprocessing
$250,000
2
05/04/2024
04/04/2025
Geological Studies
$600,000
3
05/04/2025
04/04/2026
3D Seismic Survey
$400,000
4
05/04/2026
04/04/2027
3D Seismic Interpretation
$1,000,000
5
05/04/2027
04/04/2028
Exploration Well
$18,000,000
(g) Production Licence L 15 – Not applicable.
R 1 – Compliant with current work commitments.
EP 487 Compliant with current work commitments.
EP 104 – Compliance with current work commitment under assessment.
(h) Not applicable.
(i) Not applicable.
(j) (i) Any decision to prosecute will be guided by the State Government’s Statement of Prosecution Policy and Guidelines.
(ii) Cancellation of a title is considered a last resort. Prioritisation of remediation activities by the relevant parties is preferred.
(k) DEMIRS is currently considering several options for financial assurance, not excluding establishing a pooled industry rehabilitation fund.
(l) There is no current available estimate for those costs.
(m) DEMIRS is progressing available compliance actions.
(n) Four of the recommendations have been completely implemented.
(o) One recommendation to be implemented is progressing via the implementation of a new framework for mining environmental approvals. For the other recommendation relating to publicising operator non-compliance DEMIRS is still considering a framework for publicly releasing information on operator non-compliance and will document the outcomes of it’s consideration in July 2024.
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