Cost effectiveness and levies

The mechanism for setting levies is through the preparation of a Cost Recovery Implementation Statement (CRIS) that meets the requirements of the Australian Government Cost Recovery Guidelines.

The levies that NOPSEMA collects are reflected in the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Regulations 2004.

Costs vary depending on the type and scope of regulatory submissions, which includes:

• Safety cases

• Well operations management plans

• Environment plans.

We can also cost recover on a fee-for-service basis in specific instances, such as:

• Conducting an investigation on behalf of NOPTA

• Validating a financial assurance model.

These arrangements ensure that NOPSEMA is sufficiently resourced to independently and effectively regulate safety, well integrity and environmental management.

NOPSEMA conducts regular reviews of its CRIS to ensure that cost recovery arrangements are adequate and that it can continue to effectively discharge its regulatory functions.

Notification of levies payable by stakeholders

NOPSEMA will advise stakeholders of their levy obligations by way of a Levy notification. Levy notifications are administered to the relevant contact via email. Payment terms on these notifications are 30 days. Please send any queries in relation to the levy to levynotifications@nopsema.gov.au.

Each financial year, NOPSEMA prepares a report that assesses the cost effectiveness of the authority's operations. The Cost Effective Report is available here. 

The Cost Effectiveness Report is generally issued in April each year, covering the previous financial year. The April release allows for the parliamentary tabling of NOPSEMA’s Annual Report (covering the same financial year as the Cost Effectives Report) in October, and NOPSEMA’s release of annual industry performance data in March. Information from both the annual report and industry performance data is required for the cost effectiveness report. The release of the report for the period 1 July 2018 – 30 June 2019, was delayed from April 2020 to July 2020 due impacts associated with COVID-19.

As NOPSEMA has broad ranging regulatory powers and responsibilities, it must ensure that the agency has a documented, systematic and consistent approach to how NOPSEMA will allocate its regulatory resources. For this purpose, NOPSEMA has published Allocation of NOPSEMA regulatory resources policy.

The then Petroleum (Submerged Lands) Amendment Act 2003 amended the Petroleum (Submerged Lands) Act 1967, creating NOPSEMA and providing that NOPSEMA be funded through industry levies. The equivalent provisions can be found in Part 6.9 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act). The Offshore Petroleum (Regulatory Levies) Act 2003 imposes the levies and its Regulations prescribe how the levies are worked out and when they are due and payable.

The levies include:

• safety investigation levy, to be imposed on the operator of a facility in relation to the investigation, by NOPSEMA, of an accident or dangerous occurrence at that facility, above a set threshold

• safety case levy, an annual levy to be imposed in relation to a facility (which includes licensed pipelines)

There is a standard form for notifying NOPSEMA of the number of days a mobile facility is not being operated as a facility in Safety Authority waters.