Federal Court decision | Santos

Federal Court Decision

Santos notes today’s decision by Judge Bromberg of the Federal Court of Justice to overturn the acceptance by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) of an environmental plan covering drilling and completion activities related to the Barossa gas project.

The relevant drilling activities should take place at approximately one location in the Timor Sea
140 kilometers north of the Tiwi Islands.

As a result of the decision, drilling activities will be suspended pending a positive appeal outcome or approval of a new environmental plan. Santos will try to speed up these processes.

The court’s decision was based on a finding that NOPSEMA could not be lawfully satisfied that the well environment plan met the criteria required by the regulations[1] and in particular, failed to assess whether the drill site plan showed that Santos had been consulted with every person with whom it was required by regulations to consult.

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This is a disappointing result. In accordance with past practice, Santos has consulted the Tiwi Land Council, a representative body with statutory authority under the Indigenous Rights (Northern Territory) Act 1976, regarding proposed drilling activities. Similarly, Santos had been dealing with the Northern Land Council, the indigenous representative body for the Tiwi Islands, regarding the proposed drilling activities. NOPSEMA had accepted our efforts to consult Tiwi residents in accordance with the regulations when it decided to accept the environmental plan for these activities.

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Given the importance of this decision to us, our international joint venture partners and customers, and the broader industry, we believe it should be reviewed on appeal by the Federal Court of Justice.

Santos is committed to continuously improving our advisory processes. Our relationships with the traditional owners, local communities and landowners in which we operate are very important to us.

Barossa is an important gas project for the country, improving jobs, exports and our relationships with investors and gas customers in Asia who have relied on Australia for decades to ensure their energy security.

The Barossa gas project is approximately 46 percent complete. Drilling activity is not on the critical path for the project and we have wiggle room on project costs.

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Santos appreciates the strong support of our Japanese and Korean joint venture partners who have invested in this project in good faith and based on Australia’s historical reputation as a safe and stable investment destination.

Project approval uncertainty is a public policy issue that should be urgently addressed by Australian governments to reduce risk to trade and investment in projects across the country.

[1] Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009

This ASX announcement has been approved and authorized for publication by Kevin Gallagher, Managing Director and Chief Executive Officer.

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