Hi,
It is an application for approval under the EPBC Act, this is a piece of Federal legislation that looks at matters of national environmental significance (endangered species, migratory birds, federal lands, heritage listed places etc).
Actually approval for the activity will be granted under NSW legislation -
"The proposed drilling area is located in Commonwealth marine waters and subject to the OP Act and its associated Regulations and Schedules. The Petroleum (Submerged Lands)(Management of Environment) Regulations 1999 (as Amended 2005) (P(SL)(MoE) Amended Regulations) requires that a detailed Environment Plan (EP) be prepared and submitted to the Designated Authority (DA), in this case NSW Department of Primary Industries (NSW DPI), for assessment and approval before commencing the exploration activity."
The feds can make it a control or uncontrolled action and place conditions on it, and act as a concurrance agency for the approval - but NSW will give the environmental approval.
EPBC referals are often submitted well before the activity is clearly known and are easily withdrawn and submitted again with more/clearer detail. Also, if there are components of a single larger activity they prefer to assess the cumulative impact of the entire project, not do it piecemeal.
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