Australia court rejects Santos bid to resume Barossa gas drilling

Justice Debra Mortimer said the court ordered that the appeal be dismissed, following an expedited two-day hearing in November stemming from a challenge against the drilling approval brought by some traditional owners from the Tiwi Islands. Santos had to suspend drilling on the project in the Timor Sea in September after a judge found that the environmental approval for its permit was invalid on the grounds the company had not properly consulted with some traditional owners about the project.

Australia's Federal Court rejected on Friday an appeal by Santos Ltd to resume drilling on its $3.6 billion Barossa gas project off northern Australia, dealing another setback to the company's biggest project. Justice Debra Mortimer said the court ordered that the appeal be dismissed, following an expedited two-day hearing in November stemming from a challenge against the drilling approval brought by some traditional owners from the Tiwi Islands.

Santos had to suspend drilling on the project in the Timor Sea in September after a judge found that the environmental approval for its permit was invalid on the grounds the company had not properly consulted with some traditional owners about the project. The court backed a challenge led by Tiwi Islander Dennis Tipakalippa, a member of the Munupi clan, overturning approval by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for drilling on Barossa.

Santos said it would release a statement after reading the court's decision. The Barossa gas field is 300 km (186 miles) north of Darwin, while the Tiwi Islands lie about 80 km north of Darwin.

Tipakalippa said Santos had not properly consulted the traditional owners about the drilling and told the court that the Barossa project posed a risk to sacred sites and spiritual connection to Sea Country north of the Tiwi Islands. Tipakalippa's lawyer had said Santos should have gone beyond the Tiwi Land Council to talk to people who had a specific interest in Sea Country, just as Santos had talked to groups that had fishing and tourist interests.

The court rejected the Santos arguments that it had consulted all the relevant persons who might be affected by its drilling and that it would be too hard to consult all the indigenous groups with connections to the area. "In this case, we consider it clear that Mr Tipakalippa and the Munupi clan had interests ... that required them to be consulted," the three Federal Court judges said in their decision.

Credit Suisse analyst Saul Kavonic said the court's decision "may cause a material delay to Barossa, as a new consultation process is undertaken and a new environmental plan is submitted and assessed by NOPSEMA". He said the process could take several months or longer as the regulator would need to consider a new consultation framework under heightened scrutiny.

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