Commencement of financial assurance requirements
Article published in the Regulator | Issue 6: 2014
From 1 January 2015, Part 1B – Financial Assurance will be incorporated into the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations. Regulation 5G of this new part will require titleholders to demonstrate to NOPSEMA that they meet the financial assurance requirements of section 571(2) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 as a prior condition of acceptance of an environment plan (EP) or a revised EP.
In Issue 5 of the Regulator, NOPSEMA announced the publication of a guideline on Financial assurance for petroleum titles (the guideline) to assist titleholders in complying with the financial assurance requirements for petroleum titles.
After an independent validation, NOPSEMA endorsed the Australian Petroleum Production and Exploration Association (APPEA) Method to assist titleholders in estimating appropriate levels of financial assurance for pollution incidents arising from petroleum activities (APPEA method) on 9 December 2014. Endorsement of the APPEA method is provided for in the finalised NOPSEMA guideline, which also allows for other approaches to estimate financial assurance subject to agreement by NOPSEMA and associated independent validation that may be required.
In the course of preparing an EP, titleholders should read the guideline and use the Financial Assurance Declaration and Financial Assurance Confirmation forms on NOPSEMA’s website to ensure they comply with their financial assurance obligations. Titleholders are encouraged to engage with NOPSEMA in the planning stages of EP development if the APPEA method is not being applied for titles associated with the EP.