News: STO Australia's Santos awaits court decision on Barossa gas drilling appeal

Santos Ltd (STO) won't resume drilling at its $3.6 billion Barossa gas project until Australia's Federal Court reinstates a permit ruled invalid by a judge in September, or the company secures a new permit, its lawyer told the Federal Court.

A two-day expedited appeal hearing before three judges closed on Wednesday with Santos seeking to overturn the previous ruling. The judges did not say when they will hand down their decision on the appeal.

Drilling was suspended at the Barossa project off northern Australia after a judge on Sept. 21 found that the offshore regulator's approval of Santos' drilling environment plan was invalid. The judge ruled the company had not properly consulted Tiwi Islander Dennis Tipakalippa and other traditional owners about the impact of drilling on their Sea Country.

"If and when there's another environment plan, by the appeal being allowed, or a subsequent administrative process ... that will allow drilling activities to resume," Santos' lawyer, Chris Horan, told the court.

Justice Michael Lee, one of three judges who will rule on the appeal, said the key issue at stake was whether Santos' consultation of the Tiwi Land Council was good enough to cover all the relevant persons who might be impacted by its drilling, as required.

The lawyer for Tipakalippa, Claire Harris, said Santos should have gone beyond the Tiwi Land Council to talk to traditional land owners who had a specific interest in Sea Country, just as Santos had talked to groups that had fishing and tourist interests.

Santos aims to start producing gas from Barossa in 2025 to feed its Darwin liquefied natural gas plant. The plant's current gas source, the Bayu Undan field in the Timor Sea, is set to stop producing later this year.

Santos Upstream President Brett Darley last week told analysts the project was 45% complete and "drilling activities are not on critical path to start-up at present".

While appealing the judge's decision, Santos was also working on a new environmental plan "and are working to expedite this", he said.