Financial assurance (for marine oil spill pollution)
Under section 571(2) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006, titleholders are required to have sufficient financial assurance to meet the costs, expenses and liabilities that may arise in connection with carrying out petroleum activities, including those associated with responding to a major oil spill, as a prior condition of acceptance of an environment plan. This requirement applies to new and revised environment plans.
NOPSEMA conducts environmental inspections to monitor titleholder compliance with the financial assurance requirements. The inspections focus on confirming titleholders are maintaining sufficient financial assurance throughout the life of the activity for marine oil pollution in accordance with the legislative requirements and the advice provided in Financial assurance for petroleum titles guideline.
To submit a financial assurance declaration or confirmation see the Make a Regulatory Submission page.
A titleholder is required to:
- Follow NOPSEMA's guidance including the Financial assurance requirements for petroleum titles policy and the Financial assurance for petroleum titles guideline
- submit a financial assurance declaration (FM1519) for the title
- submit a financial assurance confirmation (FM1465) for the specific environment plan.
Titleholders may choose an appropriate cost-calculation method for estimating levels of financial assurance, however, as per GL1381, this will require independent validation prior to consideration by NOPSEMA. NOPSEMA strongly encourages titleholders to engage with NOPSEMA early to allow timely validation of the method.
2018 APPEA method
The Australian Petroleum Production and Exploration Association (APPEA) has developed the 2018 APPEA Method for Estimating Levels of Financial Assurance (APPEA method) which presents a standard method that is intended to be applicable to most petroleum activities undertaken in Australian waters. Titleholders can access further information from APPEA.
On 20 December 2018, following independent validation of the methodology. NOPSEMA has confirmed it considers the 2018 APPEA method (when used in conjunction with NOPSEMA's process for making financial assurance declarations and confirmations) to be a suitable form for demonstrating financial assurance as a prior condition to acceptance of an environment plan.
Transitional arrangements
NOPSEMA has clarified transitional arrangements for titleholders utilising the APPEA method. Read the Transitional arrangements for 2018 APPEA Method - December 2018 for more information. APPEA has also produced a management of change guideline for titleholders to estimate financial assurance levels. Contact APPEA for more information.
The Australian Petroleum Production and Exploration Association (APPEA) has developed the 2018 APPEA Method for Estimating Levels of Financial Assurance (APPEA method) which presents a standard method that is intended to be applicable to most petroleum activities undertaken in Australian waters. Titleholders can access further information from APPEA.
On 20 December 2018, following independent validation of the methodology. NOPSEMA has confirmed it considers the 2018 APPEA method (when used in conjunction with NOPSEMA's process for making financial assurance declarations and confirmations) to be a suitable form for demonstrating financial assurance as a prior condition to acceptance of an environment plan.
Related documents
| Title | Type | Size | Date |
|---|---|---|---|
| Financial assurance for petroleum titles guideline | 277.25 KB | 10/01/2024 | |
| Financial assurance declaration form | 1.42 MB | 10/01/2024 | |
| Financial assurance confirmation form | 754.2 KB | 10/01/2024 | |
| Financial assurance requirements for petroleum titles policy | 205.88 KB | 10/01/2024 | |
| Transitional arrangement for 2018 APPEA Method - December 2018 | 161.17 KB | 20/12/2018 |