Santos to pay $400,00 in costs to Rallen Australia over fracking dispute

Energy giant Santos has agreed to pay $400,000 to a cattle station owner after it failed to alert them to an expanded fracking operation on their property.

UPDATE FRI: ENERGY giant Santos has agreed to pay $400,000 to a cattle station owner after it failed to alert them to an expanded fracking operation on their property.

The legal fight between the multinational energy company and one of Australia’s biggest landowners, Rallen Australia, has ended with an agreement by Santos to reform its stakeholder engagement policies, a 12-month moratorium on new petroleum operations and payment of legal fees.

The NT Supreme Court previously heard that Santos failed to alert the cattle station owners of an Environmental Management Plan (EMP) connected to two additional horizontal gas wells on the Tanumbirini Station, near Daly Waters.

Santos had permission for nine wells on the cattle station, which was negotiated with the previous owner.

But after Rallen purchased the property and an adjacent station in early 2020 for $70 million, Santos failed to alert them to a revision to its EMP which added the two wells.

Rallen argued that Santos misled and deceived farmers by not alerting them to the EMP while it was open for comment. 

From the first day of the hearing Santos acknowledged there was an “inattentiveness” to updating landholders to the EMP changes.

Santos representative Jonathan Horton QC previously argued the matter was a consumer law breach, rather than a violation of the regulations.

The two horizontal wells that sparked the major court dispute have already been drilled and are operational.

On the final day of the NT Supreme Court sitting on Friday Santos and Rallen negotiated an agreement, with the final court orders made by consent.

Justice Judith Kelly said it was critical Rallen and Santos came to an understanding, as the companies would need to continue to work with one another.

Under the agreement Santos may continue to flow test the two wells and well-pad on Tanumbirini, but no other petroleum activities can be undertaken until December 31, 2022.

“Santos will work to improve the way it engages with landholders,” Santos said in a public statement.

“Santos looks forward to a constructive working relationship with Rallen on that basis.”

Santos and Rallen will register the revised Land Access and Compensation Agreement with the Department of Industry, Tourism and Trade Minister approval as soon as possible.

UPDATE WED: ENVIRONMENTALLY risky fracking projects will come under more scrutiny as the Territory strengthens alerts for major developments.

Environment Minister Eva Lawler announced a new online subscription service would be launched on Wednesday in line with the recommendation of the Hydraulic Fracturing Pepper Inquiry.

Ms Lawler said the alert system would allow the community to have their say and keep up-to-date on drilling and hydraulic fracturing Environmental Management Plans (EMP) under assessment.

The public would be alerted as soon as an EMP was lodged to the The Department of Environment, Parks and Water Security, and would have 28 day to comment.

“When it comes to our environment, transparency and accountability are crucial to ensuring the community’s trust in Government processes and decision-making,” Ms Lawler said.

The reforms were announced after the second day of court hearings into allegations energy giant Santos misled and deceived Tanumbirini cattle property owner Rallen Australia by failing to alert them to a revised EMP.

On Tuesday the Supreme Court heard from Santos stakeholder access Adviser Mark Mayfield, who said “sloppy” internal paperwork claimed Rallen was advised over two proposed new wells despite this not happening.

A Santos letter to Rallen provided to the court said Covid and weather related delays meant they needed to extend the land access agreement, but did not mention plans for the additional gas wells.

Outside of court Nurrdalinji Native Title Aboriginal Corporation chair Johnny Wilson accused Santos of “stopping pastoralists and Traditional Owners from knowing the true story of what is happening on country”.

INITIAL TUES: ONE of the nation’s largest landholders has taken on a fracking giant over two gas wells on a cattle property in the Beetaloo Basin, accusing the Santos of leading and deceiving farmers. 

Rallen Australia and Santos appeared in the NT Supreme Court on Monday over accusations the energy company did not properly inform the new landowners of a environmentally risky proposed expansion to their fracking operation.

The court heard under an existing agreement Santos had persion for nine wells on the Tanumbirini Station, near Daly Waters. However, the energy company filed a revision to its environmental management plan (EMP) to allow for two additional horizontal wells.

In Rallen’s opening statement senior counsel Marcus Pesman said Santos had a “cavalier attitude” to meet regulations.

Mr Pesman said under the regulations Santos was required to inform stakeholders including the new landowners on the revised EMP.

“(One email) sentence was the sum total of the stakeholders engagement that Santos engaged in after they were told of substantial new risks,” he said.

Santos representative Jonathan Horton QC argued the matter was “squarely on the consumer law plane” and not a regulatory breach, which could carry more significant penalties.

“We accept there was inattentiveness to the revised (EMP),” Mr Horton said.

Santos will argue it should have been a reasonable assumption by the landowners that a revised EMP was required.

“(But Rallen) do say in their submissions … that they have a reasonable expectation that Santos will comply with the law,” Justice Judith Kelly replied.

“How were they supposed to know you were going to engage in activities that required (an EMP) if you don’t tell them?”

Mr Horton said there was extensive consultation with the previous land managers, including a station manager who went on to work with Rallen after the property sale, and Rallen Australia signed onto a revised Land Access and Compensation Agreement.

Originally published as Santos to pay $400,00 in costs to Rallen Australia over fracking dispute