The impact of recent shipping reforms on the offshore oil and gas industry in Australia

• Author: Shane Bosma
• Position: Special Counsel, Ashurst, Brisbane. This is an edited version of my address to the 39th Maritime Law Association of Australia and New Zealand Annual Conference held in Brisbane in September 2012
• Pages: 8-17

(2013) 27 A&NZ Mar LJ

8

THE IMPACT OF RECENT SHIPPING REFORMS ON THE

OFFSHORE OIL AND GAS INDUSTRY IN AUSTRALIA

Shane Bosma*

1 Introduction

It is a formative time for the Australian maritime industry, with the enactment of numerous legislative reforms

that will have a significant and lasting impact not only upon shipping within Australia, but also upon the

Australian offshore oil and gas industry. The following are the key areas that have b een subject to reform:

(1) the wholesale re-write of the Navigation Act 1912 (Cth) (‘Navigation Act 1912’) by the Navigation Act

2012 (Cth) (‘Navigation Act 2012’) and the introduction of the Marine Safety (Domestic Commercial

Vessels) National Law Act 2012 (Cth) (‘Marine Safety Act 2012’);

(2) the registration (or ‘flagging’) of s hips in Australia and the regulation of coastal trading within

Australia (cabotage); and

(3) the regulation of marine pollution within Australia.

This paper will provide an outline o f the key areas of impact that these reforms will have on the offshore oil and

gas industry in Australia.

2 The passing of the Navigation Act 2012, the Marine Safety Act 2012 and the

Interaction with the Offshore Petroleum and Greenhouse Gas Storage Act

2006 (Cth)

The Australian government has embarked upon a change of the broad legislative framework pertaining to the

regulation of vessels under the former Navigation Act 1912. The Navigation Act 2012 and Marine Safety Act

2012 are the key instruments in this regard.

2.1 Regulatory Framework for Offshore Oil and Gas Facilities

There are two key piece s of legislation of significance in respect of the regulation of offshore oil and gas

facilities; t he Navigation Act 1912 and the Offshore Petroleum a nd Greenhouse Gas Storage Act 2006 (Cth)

(‘OPGGSA’).This legislation applies at different stages of the operation of offshore oil and gas facilities.

Importantly, section 64 0 of the OPGGSA states that, where a vessel is classified as a ‘facility’ for the purposes

of the OPGGSA, the Navigation Act 1912 and other related Commonwealth marine legislation does not apply to

that facility. This definition is complex, but broadly speaking, a vessel is considered a ‘facility’ under the

OPGGSA when it is being used, or being prepared to be used, in petroleum activities. Accordingly, during

mobilisation, demobilisation and any other period in which the vessel is not being used or prepared for use in

petroleum operations, the vessel will not be considered a ‘facility’ under the OPGGSA, but rather will be a

‘ship’ under the Navigation Act 1912.

It is also important to note that the Navigation Act 1912 will not apply to a ship unless i t is on an overseas or

interstate voyage.

1 This is potentially significant to vessels engaged in the offshore oil and gas industry, for

example, floating production storage and offloading (‘FPSO’) vessels or floating LNG (‘FLNG’) vessels which

disconnect in response to adverse weather and take safe harbour in waters within the same State as the location

of the offshore field at which those vessels operate when connected. This is an area of regulatory weakness

identified in the June 2009 Offshore Petroleum Sa fety Regulation (Marine Issues) Report of Kim Bills and

David Agostini. Typically, the safety cases for ship-like facilities will now require as a condition of acceptance

* Special Counsel, Ashurst, Brisbane. This is an edited version of my address to the 39th Maritime Law Association of Australia and New

Zealand Annual Conference held in Brisbane in September 2012.

1 Navigation Act 1912 (Cth), s2.