This article analyses the capacity of the current Australian petroleum regulatory framework to encourage sustainable socio-economic extraction of Australia’s offshore petroleum resources. First it considers what sustainable development means within the context of non-renewable petroleum resources. After an examination of the petroleum resources and policies of Australia and Norway, this article focuses on the legislative framework that regulates offshore petroleum exploration and extraction. The analysis identifies a number of limitations of the current legislative framework to encourage sustainable petroleum extraction. In an attempt to provide solutions to these legislative limitations the article also analyses the Norwegian offshore petroleum policy and legislative framework, which together have encouraged the sustainable socio-economic extraction of its petroleum resources. By examining the Norwegian legislative framework, it is possible to generate a number of options for sustainable socio-economic development of Australian resources. The article makes several recommendations for Australia to encourage the sustainable development of its offshore petroleum resources.