The annual release of quality offshore petroleum exploration acreage is the first step in the search for petroleum in Australia’s offshore sedimentary basins.
A cash bidding system was introduced in 2014 to allocate offshore petroleum exploration permits in mature areas or areas known to contain petroleum accumulations.
- Mature areas: areas that are comprised of a graticular block or adjoining graticular blocks that are adjacent to known discoveries, retention leases and/or production licences, and is/are covered by appropriate 3D seismic surveys.
- Known resources: an area that is comprised of a graticular block or adjoining graticular blocks containing a petroleum pool or part of a petroleum pool from which petroleum has been recovered.
Cash bidding is an equitable, economically efficient and administratively simple system of permit allocation. It also encourages more effective activities in areas where only minimal further exploration may be required.
The Australian Government recognises that, in a global context, most of Australia’s petroleum basins have been lightly explored and for these areas the existing work program bidding system will continue.
Selection of areas
As part of the acreage selection process, stakeholders are invited to nominate vacant areas to be considered for inclusion in the annual Offshore Petroleum Exploration Acreage Release (the Acreage Release). The Australian Government will determine whether a nominated area is suitable for cash bidding or work program bidding. Nomination of an area does not guarantee its inclusion in the Acreage Release. Further information is at http://petroleum-acreage.gov.au.
Size of areas
Areas released for cash bidding will generally be small in absolute terms. This is reflective of the selection criteria, in that generally those areas of vacant acreage remaining in mature areas or areas containing known petroleum accumulations are small in size. It also facilitates a targeted approach to the provision of
pre-competitive data to encourage the successful bidder to identify drillable prospects and move to production at the earliest stage.
Security of tenure
Cash bid exploration permits provide security of tenure with an initial six (6) year permit term. The original Gazette notice will stipulate if the permit can be renewed.
As with work program exploration permits, a cash bid permit that is granted over only one graticular block cannot be renewed beyond the initial six (6) year term.
The Joint Authority will determine a reserve price for each cash bid area prior to the area being launched as part of the annual Acreage Release. The reserve price will be undisclosed.
Conditions of a cash bid exploration permit
A cash bid exploration permit may be offered subject to conditions. If conditions will be placed on the title, these will be included in the gazette notice at the time of release. Cash bid permits will not be subject to work program conditions.
What if no bids are received?
If there are no bidders on a cash bid area, the area will be passed in and remains as vacant acreage. Areas offered for cash bidding will not be re-released.
Publication of information
The name of the winning bidder, amount of the winning bid and number of bids received will be made public via a press release once the permit has been granted.
The permit title instrument on the NEATS website will detail the titleholders (by name and ARBN), the graticular block(s) and Map Sheet reference(s) contained within the permit area, the date of grant of the permit and the cash sum paid for the permit.
How do I apply for a cash bid permit?
Applying for a cash bid permit is a two stage process:
Cash bid application (prequalification)
Cash bid (with deposit)
Cash bid application (prequalification)
In order to participate in the cash bid auction, applicants must prequalify with the Joint Authority. Prequalification is an assessment of the technical qualifications of the applicant and the technical advice and financial resources available to the applicant. Only eligible applicants will be invited to submit a cash bid.
All prequalification applications are treated as commercial-in-confidence and must be submitted electronically to: firstname.lastname@example.org.
The cash bid application (prequalification) form and the amount of the application fee can be found at http://www.nopta.gov.au/forms/forms.html.
Applicants that satisfy the prequalification criteria will be invited by the Joint Authority to submit a cash bid for an area or areas. The invitation will specify a period during which the applicant may submit the cash bid, with an opening date and a closing date and time, and the manner in which the cash bid must be made.
The cash bid must state the cash amount in AUD that the applicant is willing to pay for the cash bid area and be accompanied by evidence of payment of the 10 per cent deposit of the cash bid amount into NOPTA’s nominated account. The cash bid form can be found at http://www.nopta.gov.au/forms/forms.html.
Acceptance of an offer for a cash bid exploration permit
Following the cash bid auction, the successful applicant will receive an offer from the Joint Authority for a cash bid exploration permit. The applicant has 14 days in which to accept the offer and submit payment of the balance of the cash bid sum.
Tie-breaker for equivalent bids
In the event that the two highest bidders submit equal cash bids for an area at or over the reserve, the applicants will each be invited to submit a second cash bid that exceeds their original bid. No further deposit is required.
In the event that the applicants remain tied after the second bid, the cash bid exploration permit will be offered to the first applicant to submit their second bid on a ‘first in’ basis, determined by the electronic time stamp at which the second bids are received (or in the event that neither submits a higher bid, the area will be offered to the applicant whose first bid was received earliest).
Refusing an offer
An applicant who is offered a cash bid exploration permit is entitled to refuse to accept the offer, but will forfeit their deposit. The cash bid exploration permit must be offered to the next highest eligible bidder where that bidder proposes an amount at or over the reserve.
Special Provisions – highest bid is less than the reserve price (undisclosed reserve)
In the event that the highest bidder for an area proposes an amount less than the reserve (where undisclosed), the Joint Authority may make a one-time offer to the highest bidder. If there are two equal highest bidders under the undisclosed reserve, the Joint Authority may offer the area at the reserve price to the highest bidder whose bid was received first. If the applicant does not accept the offer to match the reserve price, it will not forfeit its deposit.
Refunds for unsuccessful applicants
Deposits will be refunded to unsuccessful bidders.
Foreign investment requirements
Potential applicants are encouraged to contact the Foreign Investment Review Board when considering prequalification and bidding at: email@example.com.
All tax inquiries should be directed to the Australian Tax Office at http://www.ato.gov.au.
The Cash Bidding Guideline is available at: http://www.nopta.gov.au/legislation/index.html
For further information, please email: firstname.lastname@example.org.
|2015 Key Dates|
|Prequalification||Thursday 15 October 2015|
|Cash Bid*||Thursday 4 February 2016|
|*Only prequalified applicants will be invited to submit a cash bid.|