Risk and response in Australia's offshore petroleum sector: lessons from Varanus Island and Montara

This article analyses the role of offshore petroleum legislation in creating a risk of offshore facility integrity incidents within the Australia’s offshore petroleum jurisdiction. It examines the regulatory framework that existed at the time of the Varanus and Montara facility incidents, determining that the regulatory regime contributed to each of these incidents. This paper then assesses the response of the Commonwealth government to the risk posed by the regulatory framework, particularly the integration of well regulation as part of the National Offshore Petroleum Safety Authority’s (NOPSA) functions, and the establishment of a national offshore regulatory regulator. An assessment of regulatory reforms undertaken in response to the incidents determines that while the integration of well management into NOPSA’s functions is valuable, there is still a risk for loss of well control due to the differing standards applied to the regulation of petroleum facilities (the Safety Case Regime) and wells (Good Oilfield Practice). The paper concludes that the establishment of the National Offshore Petroleum Titles Regulator, retaining of the Joint Authority (JA) and enhancing NOPSA’s functions to include environmental management, has created a regulatory complex that is increasingly convoluted, posing a possible on-going risk for facility and well incidents in Australia’s offshore petroleum jurisdictions.