Recent news of oil and gas company Buru Energy’s plans for a pilot exploration fracking program in the Kimberley region of Western Australia, is a timely reminder for all rural landowners of the ability for those resource companies to conduct exploration and production on private land.
It is estimated that there will be 40,000 CSG wells in Australia within the next 10 years.
Many landowners remain unaware that the Queensland Government can issue exploration or production (extraction) tenements to a resource company over land that is privately owned to allow access to the land, subject to the limitations on such activities set out in the relevant Environmental Authority (EA).
It can be quite stressful for landowners and all persons and businesses that occupy land, who may be unfamiliar with their obligations, to enter into negotiations with resource companies. The process from when the first notice to the landowner is given and when activity on the land may commence can occur within the space of two months.
To conduct preliminary activities which have little impact on the land such as site scouting, a resource company must give a minimum of 10 days notice of entry to occupiers and landowners.
Advanced activities, which have significant impact on the land may only commence after a Conduct and Compensation Agreement (CCA) is in place. The CCA is the resulting document entered into after concluded negotiations with the resource company and the landowner about how the activities will be conducted and what compensation the occupiers will receive is agreed.
Compensation can be non-monetary but is usually for diminution of surface area, reduction in value, reduction in land use and potential improvements, damages, legal costs, costs of valuations, and other loss. It is also important to consider long term plans and identify areas that might need protecting given farming practice. Both parties should seek advice about compensation that can be claimed and it is vital not to leave any information out when negotiating. The more details a landowner can obtain about the proposed activities of the resource company, the more informed position they will be in to negotiate an amount of compensation. Those who can make a claim for compensation include not only the landowner but also rural businesses who occupy the land.
In Queensland, the mandatory negotiation process for agreeing on a CCA is set out by the Petroleum and Gas (Production and Safety) Act 2004 (Qld).A resource company wanting to conduct advanced activities on private land must issue a Notice of Intention to Negotiate to each occupier.If after 20 days no CCA has been agreed to, then the parties will either engage in alternative dispute resolution (ADR) or a formal conference with a Departmental officer from the Department of Natural Resources and Mines. The ADR process can be costly but there are advantages and disadvantages for both options. If 20 days after commencing the ADR there is still no CCA, then a party can apply to the Land Court for final determination.Importantly, once the matter has reached the Land Court, a resource company can commence advanced activities while the CCA is still unconfirmed.
Once the mining activities have commenced on your land and a CCA is in place it is important that landowners familiarise themselves with the EA which would have been issued by the Department of Environment and Heritage Protection. This will say what activities the company is authorised to engage in. Similarly, the company must comply with the Land Access Code released by the Department of Natural Resources and Mines. The Land Access Code provides best practice guidelines as to how these activities should be carried out.
It is important for both parties to negotiate in good faith and be reasonable in their dealings with each other. For further information and to check whether tenure has been granted by the Queensland Government over your land, Holding Redlich’s Agribusiness & Rural Industries Group is able to assist with further advice.
If you have been approached by a resource company, are currently engaged in negotiations or require advice about a grant of tenure over an area encompassing your property please contact the Holding Redlich Agribusiness & Rural Industries Group.
 Petroleum and Gas (Production and Safety) Act 2004 (Qld), ss 532 to 534.
 Ibid ss 535 to 537D.
 Ibid 537AB.
 Ibid 537B.
 Ibid s 500A.
Author: Amy Falwasser
Ron Eames, Partner
T: +61 7 3135 0629
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed above.