Offshore Petroleum Exploration Acreage Release

AUSTRALIA 2012

Offshore Petroleum Exploration Acreage Release

Foreign investment

This document has been developed as a guide only. It does not replace or amend information provided in the Offshore Petroleum Legislation, Regulations and Guidelines available at: In the event that there is a discrepancy between this document and the legislation, the legislation has precedence. Explorers should not rely solely on this information when making commercial decisions.

The Australian Government recognises the substantial economic and social contribution that foreign investment has made, and will continue to make.

Foreign investment brings many benefits to Australia. It underpins higher rates of economic activity and employment, provides access to new technology and skills, access to overseas markets, and promotes continued competition.

Assistance from Austrade

The Australian Trade Commission (Austrade) is responsible for the facilitation of foreign direct investment into Australia and for the promotion of Australia as an internationally competitive place to do business.

Though its global network in over 55 countries, Austrade provides international businesses with a single, integrated point-of-contact for all trade and investment inquiries and can provide companies with the information needed to establish, or expand, a business in Australia.

Key services Austrade offers include:

• Information on the business environment: covering issues such as business costs, the taxation regime, investment regulations, skills availability and immigration requirements.
• Market intelligence reports/executive briefs: specific information on Australia's capabilities across a wide range of industry sectors.
• Site visits: assistance to identify the most suitable location and potential partners in Australia for your business, in conjunction with relevant state and/orterritory investment agencies and industry groups.
• Australian Government programs: advice on the Government’s industry development programs that may be applicable to your business, including support for research, development, innovation and export activities.
• Government approval processes: advice on any Government approvals required to facilitate your business activities in Australiaand assistance to streamline the relevant processes.

For further information visit: or call Austrade on 13 28 78 (Australia only), +612 9392 2035 (from outside Australia); or email .

Australia’s Foreign Investment Policy

The Government welcomes foreign investment. The Foreign Acquisitions and Takeovers Act 1975 (theAct) provides the legislative framework to screen specified foreign investment. Australia adopts a preestablishment screening process that aims to provide a straightforward, low cost mechanism for reviewing the proposed operations of foreign investors. Foreign investors apply to the ForeignInvestment Review Board (FIRB) if required. Thisscreening process provides foreign investors with assurance prior to outlaying finances. It applies to proposed foreign investment in Australian businesses and business assets, across any industry sector, including petroleum, which are valued at or above relevant annually indexed monetary thresholds.

Australia’s Foreign Investment Policy (the Policy), the Act and screening process are the responsibility of the Australian Treasurer, who receives advice from the FIRBwhen reviewing investment proposals to decideif they are contrary to Australia’s national interest. The Treasurer can block proposals that are contrary to the national interest or apply conditions to the way proposals are implemented to ensure they are not contrary to the national interest.

Investment proposals are considered case-by-case against the national interest rather than against hard and fast rules. This maximises investment flows, while protecting Australia’s interests. The concept of national interest includes factors such as national security, competition, other Australian Government policies (such as tax and environmental policy), impact on the economy and the community, and the character of the investor.

Privatelyowned (i.e. non foreign government) foreign investorsdo not need to seek approval before lodging an application for the award of petroleum exploration acreage. Neither is approval required for the grant of exploration acreage and the subsequent development of any petroleumdiscovery.

In relation to offshore petroleum activities, notification and approvals may be required by foreign investors for farmin/farm-out activities, equity acquisitions, or acquisitionsof existing interests in exploration permits[i], production licences and retention leases and/or production facilities, subject to the thresholds outlined below. For foreign governments and their related entities, prior approval is required before making a direct investment in Australia (regardless of the value of the investment) and also before starting a new business, or acquiring an interest in Australian urban land.[ii]

All foreign persons should notify the Government before acquiring an interest of 15percent or more in an Australian business or corporation that is valued above A$244million, or an offshore company whose Australian subsidiaries or gross assets are valued above A$244million. Notification requirements also apply where an acquisition by a foreign person would result in foreign persons holding an aggregate interest of 40percent or more in such Australian businesses or corporations. A threshold of A$1,062million applies to US investors as defined under the Policy3.

Please note that the monetary values listed above are those for 2012. Thresholds are indexed annually on 1January. Investors are advised to confirm notification requirements and relevant thresholds with the FIRB at the time of investment.

The Government encourages potential investors to engage with FIRB prior to lodging applications on significant proposals to allow timely consideration. The Government will treat proposals as in-confidence.

Further information on the Policy and the Act is available on the FIRB site at

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ACKNOWLEDGEMENTS

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© Commonwealth of Australia 2012

This work is copyright. It may be reproduced in whole or part subject to the inclusion of an acknowledgment of the source and no commercial usage or sale. Reproduction for purposes other than those indicated above requires written permission of the Commonwealth. Requests and inquiries should be addressed to the Manager, Media and Communications, Department of Resources, Energy and Tourism GPO Box 1564,CANBERRA ACT 2601.

This document has been developed as a guide only. It does not replace or amend information provided in the Offshore Petroleum Legislation, Regulations and Guidelines available at you should not rely solely on this information, and you should seek independent legal advice when making a commercial decision.

ISBN 978-1-921812-94-1

Electronic copies of this document are available at by contacting the Department of Resources, Energy and Tourism:

Manager - Media and Communications
Department of Resources, Energy and Tourism
GPO Box 1564
CANBERRA ACT, 2601
Telephone: +61 2 6276 1000
Fax: +61 2 6243 7037
Email:

Prepared by:
Exploration Section
Offshore Resources Branch

Image courtesy of Santos Ltd

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[i] See sections 5 and 12A of the Act and in particular, paragraph12A(1)(c).

[ii] Foreign governments and their related entities and direct investment are defined under the Policy (available at Also, Australian urban land is defined in sections 5 and 12A of the Act and includes all seabed within Australia’s Exclusive Economic Zone (EEZ).

3 Australia signed an Investment Protocol with New Zealand on 16 February 2011. Once implemented, New Zealand investors will be subject to the same thresholds that apply to US investors. Further information is available on the FIRB site at