A while back I posted that there are three separate and distinct reasons why PEP11 can go ahead, (1) win the court case, and (2) the DISER instrument is deemed invalid were the first two, see this thread (https://hotcopper.com.au/threads/bph-why-pep11-can-win-the-pep11-courtcase.7053905/)
Now I provide what I consider to be the most certain, the third...
(3) The COVID application.
Long term holders will be familiar with reading comments like these:-
Morrison said the Government’s decision under section 59(3) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to propose to refuse the application had been formalised.
“PEP-11 is officially dead in the water,” he said.
“I said the project would not proceed on our watch, and that is exactly what has happened.
“The decision has been finalised to ensure PEP-11 will not go ahead.”
The above comments were just another lie from Scott Morrison in his ill-fated pursuit of votes. The refusal of the application validly submitted 23/1/20 cannot ensure PEP11 is cancelled due to the existence of the Suspension and Extension application validly submitted 4/2/21, aka The COVID application.
The COVID application presents a number of challenges for PEP11 detractors.
Firstly, the COVID application was submitted by Asset, and by other companies, as a result of an invitation from the Government, ie the Government encouraged companies to seek extensions due to the prevailing issues at the time.
Secondly, I am not aware of any COVID application having been declined, the criteria is not particularly complex.
Does PEP11 qualify?
The recent release of the NOPTA approval document is a smoking gun for the COVID application. NOPTA's approval advice included the following:-
The current inability of operatorsto undertake offshore petroleum operations due to the COVID-19 pandemic has also beenconsidered.NOPTA considers that Asset has provided reasonable supporting evidence that it has beenprogressing plans to drill in PEP-11, based on the information provided by AddEnergy and COSL,and the descriptions of activity in its monthly reports to NOPTA.Since the application was submitted, there has been a significant increase in uncertainty relatingto future rig availability and contract opportunities due to the restrictions associated with theCOVID-19 pandemic. On 20 April 2020 Beach announced to the ASX that it had terminated thecontract for the Ocean Onyx with a view to agreeing a new contract in due course. Beach’spreliminary assessment is that its offshore drilling campaign is unlikely to commence until the2021 financial year. Similarly, the COSL Prospector is expected to depart from New Zealandwaters in late April 2020 after its drilling campaign for OMV was terminated. Asset advised in itsmonthly report to NOPTA on 20 April 2020 that COSL has extended its offer to May 2021.
NOPTA approval.pdf
The FOI documents verify that Asset had well advanced discussions regarding rig bookings. Long term holders will also recall that the Ocean Onyx was becalmed in Port Phillip Bay off Port Arlington for the entirety of 2021. Rigs could not be booked during the COVID lockdowns.
So, IMO, in the unlikely event that the Federal Court case failed, and if the Bell Inquiry found that challenging the validity of the DISER instrument was unlikely to succeed, the approval of the COVID application is, in my opinion, is certain.
It is also important to note that the second application was placed on hold pending resolution of the first, refer Senate minutes from February 2022:-
Senator WALSH: When we spoke about this in the October estimates, there was a little bit of confusionbecause there was a second application that we were talking about. I think NOPTA said at the time that they wereawaiting a decision on the first application before they could provide advice on the second application. Now thatwe're in this process around the first application being refused, what is the status of the second application?
Mr Waters: That situation has not altered. I am still waiting for the decision of the joint authority, and onceI've had that we will then submit our advice on the second application.
Senator WALSH: Who has made the second application?
WATERS: The titleholder.
Ms Illman: Asset Energy.
Senator WALSH: It's basically the same application again to do this seismic testing, is it?
Ms Illman: It's an application for a suspension and extension. The first application we're talking about is asuspension, extension and variation of the permit conditions. They're very similar.
Mr Fredericks: Yes.
Senator WALSH: I might be asking you to speculate, and I guess you'll tell me that, but in layperson's termswould it be understood that there's not a lot of point in continuing with the second application if a similar firstapplication has been refused?
Mr Fredericks: We'd probably have to be a little bit careful in giving any view on that for fear that it mightpre-empt a decision that's going to be made by the joint authority. I understand why you're asking this.
Senator WALSH: Is it alive? Is this issue still alive?
Mr Fredericks: Are you able to, in layman's terms, explain the nature of the difference between the twoapplications?
Ms Illman: Certainly. The second application is a request for a suspension of the work program conditionsand an extension of the permit term, very similar to the first one. The first application, however, was to removethe seismic survey obligation. The second one has been made in order to essentially provide more time tocomplete the work program. The applicant is still waiting on the resolution of the first decision that is, thedecision to remove the seismic obligation. They have made a second application just in case they need additionaltime to continue the work.
Senator WALSH: The work that's been refused?
Mr Sullivan: Following on from where Mr Fredricks was headed, I'd prefer to take it on notice. When we'vegot resolution of the first matter, I'd be much more comfortable to then provide advice on notice.
Mr Fredericks: Obviously we are nervous given that the first application is still alive because it's still waitingfor a decision from the New South Wales member of the joint authority. We've got to be careful there. With thesecond one, the application is in, so it's technically alive. That's why we're being hesitant.
Senator WALSH: I understand how you're trying to assist. Is it not possible for the Prime Minister, as thedecision-maker on the joint authority, to make a decision about the second application until the first one isfinalised? Or would it be possible?
Mr Sullivan: That's a complete hypothetical. I think what we need to do is cross the bridge with the firstapplication. Once that's resolved, we can try to bring the second one to some sort of finalisation.
Ms Illman: That's right. I will explain why that is. The first application sought to change the time frame inwhich the permit obligations, or the work program, were to be delivered. If it were approved, that would changethe time frame by which commitments had to be done. That is why the second application is contingent upon thefirst one being resolved. Of course, if it is refused it is up to the applicant to consider whether they wish to amendthat second application.
Mr Fredericks: It's not easy to explain, Senator, but the gist is that our advice is that the second application iscontingent on the outcomes of the first. I think that's the proper answer to your question.
Senator WALSH: Okay. I think I've taken that line of questioning as far as I can.
11 - Senate minutes extract.pdf
Of significant importance to me was that the NOPTA approval gave clear approval to the removal of the 3D Seismic, nor was it listed by Scott Morrison amongst the reason for refusal, which is the fundamental difference between the two applications i.e. the variation component. With NOPTA having failed to find fault with the variation component, Asset is free to lodge a standalone variation to Year 5 work program which IMO cannot be rejected due to the precedent. In fact, I think it would be prudent of Asset to lodge such a variation now to send a clear message that they intend to drill PEP11.
Ofcourse, I don't discount Albanese trying to buy his way out of the mess Scott Morrison has created but my interpretation of David Breeze's comments is that he wants to push on with PEP11 due to the favourable environment in NSW and globally.
Full disclosure - Due to the reasons outlined in my threads, and the evidence given by DISER reps in the Senate this week, and the impending release of the Bell Inquiry findings, I have this week purchased shares in BPH.
JMO. DYOR. GLTAH.
(20min delay)