NSW Office of Coal Seam Gas rejects Metgasco Limited's 'evidence' that it has conducted community consultation with regard to its plan to drill for tight gas at Bentley

NSW Government Coal Seam Gas Statement on Metgasco

Metgasco - petroleum exploration licence 16

Status of Rosella exploration well activity approval

On 14 May 2014 the Office of Coal Seam Gas OCSG put a hold on Metgasco's approval to drill an exploration well at Bentley, near Casino in the Northern Rivers, on the basis that the company was not in compliance with its community consultation obligations under Petroleum Exploration Licence 16 (PEL 16).

Metgasco Ltd wrote to the OCSG on 15 May 2014 requesting that the OCSG review its decision of 14 May 2014.

Metgasco provided the OCSG with additional material about its community consultation activities for the proposed drilling of the Rosella Exploration Well to consider as part of the review.

OCSG met with Metgasco on 16 May 2014 to discuss the regulator's decision of 14 May 2014 and the company's submission.

The OCSG has reviewed this additional material. At this stage, the decision of 14 May 2014 still stands, given the company has not effectively and genuinely engaged with the community or put in place an appropriate community consultation plan in accordance with the Guideline for community consultation requirements for exploration ("the Guideline").

OCSG has informed Metgasco of this and given the company a further 7 days to make any further submissions. A final decision on review will be made following full consideration of any further submissions.

The OCSG has maintained an ongoing dialogue with Metgasco in relation to this matter.

Compliance with Community Consultation Condition

Community consultation and engagement is a key element of the regulatory framework for petroleum exploration projects in NSW.

This is reflected in the imposition of a specific condition on petroleum exploration licences (PELs) issued under the Petroleum (Onshore) Act 1991 (the Act). The conditions make it mandatory for petroleum exploration licence holders to "engage with the community in relation to the planning for and conduct of prospecting operations". This condition is supported by a guideline: Guideline for community consultation requirements for exploration (the Guideline).

In addition, licence holders must report on compliance with the above condition annually.

The OCSG acknowledges that some sections of the community are opposed to the development of a gas industry for a variety reasons. We do not expect licence holders such as Metgasco to be able to change their view points.

We do however expect that licence holders such as Metgasco will develop a detailed consultation plan in compliance with the Guideline and demonstrate an ability to effectively and genuinely engage with the community.

The plan should be appropriate to the circumstances of the case and include a detailed analysis of stakeholder groups in the Richmond Valley, Kyogle Shire and Lismore City Council areas.

The OCSG has advised Metgasco that works could be recommenced under the activity approval once an acceptable community consultation plan is in place and the company demonstrates an ability to appropriately engage with the community, in compliance with relevant obligations under PEL 16.

Metgasco Limited has responded to this stance by the Office of Coal Seam Gas by requesting it to temporarily suspend its review and advising the Office that the mining exploration company considers its actions to be unlawful.