Reprimand oil companies that withdraw investment, Nationals Senator Matt Canavan says
The former minister who backed Norwegian oil giant Equinor’s Bight drilling plans says he’s now pushing for penalties for companies that walk away from their commitments.
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Oil companies that abandon their plans to drill in the Great Australia Bight would be charged a quarter of their exploration program commitments, under a Federal Government proposal.
The Advertiser can reveal that former resources minister Matt Canavan had been working to reprimand organisations that breach their commitment to invest in exploration activities after receiving offshore acreage.
It comes days after Norwegian company Equinor withdrew its oil exploration plans in The Bight.
Nationals Senator Matt Canavan, who resigned from Cabinet this month, said he was “upset” because the government had assisted the energy company.
“They get the title for free but they commit to do a minimum amount of work and they are reneging and breaching that agreement,” he said.
Senator Canavan said it took three years for the government to reach a $116.5 million oil and gas exploration agreement with BP and Chevron after they withdrew their plans.
“A breach of work commitments (should) simply require a certain minimum percentage of the work commitment to be paid to the Commonwealth Government,” he said, adding it should be at least 25 per cent.
“We would use that money to reinvest in our offshore resources.
“If you breach that obligation there should be a penalty.”
Senator Canavan said Equinor’s decision was disappointing for Australia, which needs to find new sources of oil and gas to stem its rapidly declining fuel security.
“The missed opportunities are huge,” he said.
Negotiating a good standing agreement with Equinor is now the responsibility of new Resources Minister Keith Pitt, who says he will work to get the “best possible” deal.
“Equinor maintains a presence in Australia and as Resources Minister I encourage and would welcome any future exploration investment by the company, including in South Australia, should commercial considerations improve,” Mr Pitt said.
Greens Senator Sarah Hanson-Young reignited a push for The Bight to gain World Heritage listing but failed to gain enough support in the Senate.
She on Wednesday wrote to Prime Minister Scott Morrison asking him to help progress the submission.
“Equinor’s withdrawal is an opportunity to celebrate the pristine and precious Great Australian Bight and to protect it for future generations and the rest of the world to come and experience,” she wrote.