CSG explorer barred from NW NSW

The company had applied for three licenses to drill between Dubbo, Narromine and Gulgong, as well as around Binnaway and Coolah and in the Blue Mountains.

Minister for Natural Resources Anthony Roberts said the OCSG refused the applications, deeming CEEMAC had not provided satisfactory evidence of its credentials under Section 15 of the Petroleum (Onshore) Act.

Energy consultant Chris McPherson was the driving force behind CEEMAC's application. The application was motivated by requests from "many" large gas users, including regional manufacturers, which were seeking access to cheaper supplies, he said.

Mr McPherson planned to form a gas user co-operative, which could produce gas and provide supply outside of expensive contracts offered by large retailers, where prices are linked to more costly export markets.

The Petroleum (Onshore) Act requires exploration applicants to provide evidence of their financial standing, technical capabilities and ability to comply with regulation.

CEEMAC was given an opportunity to respond to an intended refusal of the applications, Mr Roberts said.

“The Office of CSG has refused the three Petroleum Exploration Licence Applications for the reason that the evidence supplied in support of the applications was not satisfactory,” he said.

Exploration proponents are required to provide a six year work program.

“The government rejected the application on the grounds I wasn't a big energy company and I couldn't prove I could develop the program for the whole six years into the future,” Mr McPherson said.

In March, Mr Roberts said “the exploration application process under the former Labor government was not up to scratch”.

He froze new exploration applications for six months, raised application fees from $1000 to $50,000 and started an audit of existing applications is currently underway.

CEEMAC is the most recent scalp, but in March, Mr Roberts canned Grainger Resources’ application to explore in the Riverina, saying its submission was “manifestly deficient”.

Mr McPherson said “the solution for lower cost gas lies in lots of new supply from lots of new people with new ideas”, and that licenses should only be granted if proponents can demonstrate they can operate safely.

However, CEEMAC’s application was a victim of a “chicken and egg” scenario.

The government would not grant a licence to a small operator, but the large gas users would not add their weight to the proposal until the government had approved the exploration plan, he said.