NT beef giant Rallen forced to give Tamboran gas exploration access
A tribunal has ordered Beetaloo Basin pastoralists Rallen to allow Tamboran Resources access to explore for gas on its land.
A tribunal has ordered a wealthy Beetaloo Basin pastoralist who believes onshore gas development cannot coexist with the cattle industry to allow explorers onto his land and set the compensation payable at 1000-fold below what the pastoralist demanded.
The dispute between Rallen Australia and Tamboran Resources – also known as Sweetpea Petroleum – is being seen by players in both industries as the first test of a new Northern Territory regulatory regime, involving one of Australia’s most prospective onshore gas provinces.
Rallen, a South African-backed vehicle of the wealthy Ravazzotti and Langenhoven families, has become one of Australia’s largest landholders partly by amassing about 1.1 million hectares of pastoral leases, mainly in the Beetaloo Basin.
Rallen’s purchases raised eyebrows partly because most occurred after a fracking moratorium was lifted, and the company appears to have little history of running cattle.
Sydney-based Pierre Langenhoven told a Senate inquiry hearing in March that gas exploration in the Beetaloo should not be “pursued at all” for environmental reasons, including the potential impacts on water resources and climate change.
“The cattle industry can coexist with other users of the land, modern and traditional, but the gas industry cannot coexist with any,” he said.
“We are pretty tough emotionally, as anyone who lives and works out on the land is, but we are frustrated, demoralised, angry and just plain scared of what is happening out there and what these foreign and local investors can do to the land and how they treat the people on it.”
He said Rallen had invested almost $200m in its pastoral business over the past four years, more than Tamboran’s entire $155m market capitalisation.
After Rallen and Tamboran failed to reach an agreement about access to Tanumbirini Station, south of Katherine, Tamboran took Rallen to the NT Civil and Administrative Tribunal, seeking to enforce an access agreement.
Rallen asked NTCAT not to determine access, effectively blocking Tamboran’s access, even though the legislation does not give pastoralists – who are leaseholders rather than landowners – veto rights over what explorers can do.
It said if NTCAT refused, then Tamboran should be made to pay as much as $17 million per well for drilling.
Tamboran argued those “absurd” amounts could mean it ended up paying more than the entire market value of Tanumbirini just to do basic exploration.
It said any such benchmark “will likely prevent and discourage exploration in the Beetaloo … per se”.
In a decision handed down last week, NTCAT ordered Rallen to give Tamboran access to Tanumbirini, subject to certain conditions. Those included that it does “everything that is reasonably practicable” to avoid disturbing Rallen’s livestock or spreading weeds.
“(Tamboran) must pay (Rallen) the minimum amount of compensation payable for the drilling of a well on the land of $15,000 per well,” NTCAT ordered. “It is not anticipated that the activities carried out on the land by (Tamboran) will lead to a decrease in the market value of the land.” Rallen had argued the decrease in market value could be significant.
NTCAT set initial compensation rates at $50,000 per wellpad and $15,000 per well, with $5000 per year for each payable subsequently, while they remain active. It set lesser rates for other activities. The $15,000-per-well figure is understood to be similar to the one prescribed in Rallen’s existing but confidential access agreement with Santos.
Tamboran’s managing director and chief executive Joel Riddle welcomed NTCAT’s decision.
“The determination provides what we believe to be fair compensation for the pastoral leaseholder. Importantly, the determination allows us to commence our calendar year 2022 activities at Tanumbirini Station,” he said.
“We believe that Australians deserve access to affordable gas as the country transitions towards renewable energy sources. This can only be delivered by developing our significant local gas resources. Without this, Australian households and businesses on the east coast could be exposed to the increasing price of global LNG, which has already resulted in materially higher prices in Europe.”
The terms of the Land Access and Compensation Agreement are applicable until the termination or expiry of Tamboran’s EP 136 exploration permit. Mr Riddle said NTCAT proceedings were still under way regarding access to nearby Beetaloo Station, and an application to the NT Supreme Court had been made to appeal NTCAT’s.
The Australian understands Rallen is involved in legal disputes elsewhere with other gas explorers. Mr Langenhoven did not respond to a request for comment on Monday.