Northern Territory Unconventional Resources: A Regulatory Perspective

Abstract

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 182404, “Unconventional-Resources Exploration and Development in the Northern Territory—Challenges From a Regulator’s Perspective,” by M. Rezazadeh, J. van Hattum, and D. Marozzi, Northern Territory Department of Mines and Energy, prepared for the 2016 SPE Asia Pacific Oil and Gas Conference and Exhibition, Perth, Australia, 25–27 October. The paper has not been peer reviewed. The production of conventional onshore oil and gas in Australia’s Northern Territory began in 1983 from the Palm Valley Field (gas) in the Amadeus Basin. Until 2010, the industry relied on conventional oil and gas development technology, but, in recent years, the focus of the industry has shifted to unconventional-resource exploration. This paper outlines the key issues that must be addressed from a regulatory perspective in regard to the development of an onshore unconventional-gas industry in the Northern Territory. Introduction In the Northern Territory, the Department of Mines and Energy (DME) is the agency responsible for regulating the exploration and production of oil and gas and the administration of petroleum tenures and petroleum pipelines onshore and in designated coastal waters up to 3 nautical miles seaward from the Territorial Sea Baseline of the Northern Territory. The DME’s role is to ensure that best-practice regulatory principles are applied for the sustainable and safe exploration and production of natural resources in the Northern Territory. In the Northern Territory, hydraulic fracturing has taken place since 1967, mainly as a process to enhance hydrocarbon production from conventional reservoirs with vertical wells. Since 2011, however, hydraulic fracturing has been carried out during exploration for unconventional hydrocarbons. Until now, developmental drilling has taken place only in producing fields in the Amadeus Basin. In the McArthur, Bonaparte, South Georgina, and Pedirka Basins, exploration activities are ongoing. Onshore Northern Territory oil production comes from the Mereenie and Surprise Fields. Until November 2015, onshore gas production in the Northern Territory came from the Mereenie and Palm Valley Fields. In December 2015, the Dingo Field began producing gas. In 2015, 3,703 MMscf of gas was produced from the three fields.   Current Northern Territory Onshore Petroleum Regulatory Framework The Northern Territory Petroleum Act is the principal existing legislation regulating oil and gas exploration and production. The DME currently uses the Schedule of Onshore Petroleum Exploration and Production Requirements (referred to here as the Schedule) to regulate petroleum activities; this guideline is similar to that which Western Australia previously used. In 2015, Western Australia replaced the Schedule with its Petroleum Resource Management and Administration Regulations. The Schedule is used to provide requirements to regulate and audit all petroleum activities.