Oil and Gas

Recent enforcement activity by the US Federal Energy Regulatory Commission (FERC) has highlighted the risks to electricity market participants who seek to manipulate energy markets for financial gain.

While the National Energy Customer Framework is already operating in some Australian jurisdictions; in others it remains a waiting game. We provide an update on where each jurisdiction is at.

In this edition of the Energy & Resources Update, we look at:

• New ASX reporting requirements for oil and gas companies
• State Agreement secures DomGas reserves for WA
• Demanding attention: the regulatory implications of reduced consumption
• Reserving domestic gas – the pressure is mounting

Allison Warburton and Joel Reid discussed whether state and federal governments might impose gas reservation policies, requiring a portion of gas reserves to be dedicated to domestic consumption, in The Australian on 24 June 2013.

The first State Agreement relating to an onshore petroleum project executed by the Western Australian Government (with Buru Energy Limited, Mitsubishi Corporation and two of Mitsubishi's subsidiaries) received the support of both houses of Parliament in June 2013. As the first State Agreement to cover onshore exploration and development in WA, the Buru Agreement reflects the scale, prospectivity and strategic importance of the project for WA; and critically, the State Government has potentially secured future domestic gas reserves.

ASX has recently tightened up its reporting requirements for listed oil and gas companies, as part of a general review of its rules for reserves and resources reporting. These measures are intended to instil confidence in the market, and reflect ASX's emphasis on transparent markets, informed investors and clear, efficient regulation procedures. This article discusses what you need to do and when to prepare for the changes.

Minter Ellison has contributed the Australia chapter for the publication The Energy Regulation and Markets Review, published by Law Business Research Ltd in the UK.

The Standing Council on Energy and Resources has announced reforms to the regime for limited merits review of decisions affecting prices for electricity networks and gas pipelines under the National Gas Law and National Electricity Law. These reforms will place greater emphasis on the need to prove that varying the regulator's decision will produce an overall outcome that is ‘materially preferable’ in promoting the long term interests of consumers.

On 1 May 2013 the Queensland government announced the details for the repeal of the gas electricity certificate (GEC) scheme, and published draft legislation to make 2013 the last liability year of the scheme. Any GECs must be created prior to 30 April 2014.

On 28 December 2012, the PRC National People’s Congress passed Amendments to the PRC Labour Contract Law (the Amendments) in relation to the labour dispatch arrangement. The Amendments will come into force on 1 July 2013.

On 31 December 2012, the China International Economic and Trade Arbitration Commission (CIETAC), a foreign-related arbitration commission set up by the China Council for the Promotion of International Trade (also known as the China Chamber of International Commerce) (CCPIT), released its Announcement on Issues Concerning CIETAC Shanghai Sub-Commission and CIETAC South China Sub-Commission" (the Latest Announcement). This is the latest development in a dispute, which has been on foot since April 2012, between CIETAC, the Shanghai Sub-Commission of CIETAC (CIETAC Shanghai), and the Shenzhen Court of International Arbitration (SCIA) (the CIETAC Dispute). SCIA was known as the South China Sub-Commission of CIETAC before 22 October 2012.

On Tuesday, 29 November 2011, as part of its Mid-Year Economic and Fiscal Outlook 2011-12, the Federal Government announced a package of changes intended to raise A$11.5 billion in new revenue and savings.

On 1 November 2011, the State Council of the People's Republic of China's Decision on amending the Provisional Regulations of the People's Republic of China on Resource Tax (Decision) will take effect. The Decision increases taxes on the sales of certain resources and extends certain existing resources tax nationwide.

The ASX released a consultation paper on 5 October 2011, with reform proposals for the public reporting of reserves and resources by mining and oil and gas exploration and production companies, including proposed amendments to the ASX Listing Rules. In this Alert, we look at the proposals and their likely effect.