Gas company Santos lost a landmark legal battle this week, with its appeal over the finding against its $4.7 billion Barossa gas project north of the Tiwi Islands slapped down by the Federal Court.
The ruling is a major victory for traditional owners, who argued they weren’t consulted about the company’s plans to drill for gas and pipe it through Tiwi sea country to Darwin for export.
But as celebrations erupted on the islands north of Darwin on Friday, Santos confirmed it intends to push ahead with the project.
So what does the decision mean and what happens next?
What happened in court this week?
On Friday, the full bench of the Federal Court dismissed the gas company’s appeal against the September decision that overturned its environmental approvals for the massive Barossa project.
Approval for the project — which would involve drilling for gas in the Timor Sea 300 kilometres north of Darwin — had been granted by the National Offshore Petroleum and Safety Environmental Management Authority (NOPSEMA) last February.
Lawyers for Munupi clan leader Dennis Murphy Tipakalippa argued that Santos and NOPSEMA failed to ensure “relevant parties” were adequately consulted about the project, as required by law.
Lawyers for Santos argued that while traditional owners’ connection to their sea country was “genuine and real”, it was more akin to a personal interest “in the sense of a past time or hobby” than a legal interest.
On Friday, the court’s full bench rejected that idea.
Justices Debrah Mortimer and Michael Lee’s wrote:
“We would not, as Santos urged, confine ‘interests’ to ‘legal interests’ and reject the proposition that the connection of traditional owners with sea country cannot be an interest for the purposes of [the] regulation.
“There was a real potential for Santos’ proposed drilling activity to have a potentially significant adverse effect on the marine resources closer to the Tiwi Islands, which were a fundamental part of the traditional culture and customs of the Tiwi Islanders.”
The justices also rejected the argument that Santos was being unreasonably required to consult “each and every person” potentially affected by the project.
They pointed to long-standing consultation requirements under native title law, where people holding communal interests are consulted “in a workable manner”.
“We reject the submission that to construe [the offshore gas consultation regulation] in this way makes this provision unworkable, in the sense that it is just too hard to consult with traditional owners as was required in this case,” the judgement read.
What has been the reaction so far?
Environmental lawyers and greens groups have welcomed the decision, saying it sets the standard around the level of consultation required for new oil and gas projects.
Greens senator for Western Australia, Dorinda Cox said all recent approvals of similar projects by NOPSEMA should be reviewed “to ensure such glaring omissions haven’t been swept under the rug”.
Bruce Robertson, a financial energy analyst at the Institute for Energy, Economics and Financial Analysis (IEEFA), said the ruling would influence investor confidence in the project, as well as others on the Australia’s north-west shelf.
“For projects like Barossa, Santos’ partners will be looking very, very closely at whether they actually decide to proceed with this,” he said.
Mr Robertson said the ruling would likely delay approvals processes for future oil and gas projects around Australia by setting a “higher standard required of consultation with traditional owners”.
“It will take more time to find the right people and to consult with them, especially in remote areas like the Kimberley and Tiwi Islands, and the Beetaloo,” he said.
Australia’s peak body for the oil and gas industry said that meant “increasing approvals uncertainty” for investors.
In a statement, Australian Petroleum Production and Exploration Association chief executive Samantha McCulloch said “there is now the risk of more delays and obstacles in the progression of important energy projects”.
“This is not an issue that affects one company,” she said in a statement.
“It affects 35 environment plans for activities in the offshore oil and gas industry. Some companies have vessels and equipment on stand by at a cost of millions of dollars a day.”
The industry and Santos have called on the government to review approvals processes.
A government spokesperson said Labor is reviewing the implications of the court’s decision.
What will Santos do next?
Following the release of the judgement on Friday, a company spokesperson said Santos hopes to win fresh approvals for its revised environment plan and carry on with the project as planned.
“Santos has always sought to meet its consultation responsibilities and is continuing the process of revising the drilling environment plan to address the matters contained in the judgement,” the spokesperson said.
The spokesperson also said the company doesn’t expect “any material cost or schedule impact” from the court proceedings.
“First gas from the Barossa Gas Project remains on track to be delivered in the first half of 2025,” the spokesperson said.
But the company’s confidence in securing new approvals is complicated by the Munupi clan’s position on fresh consultation after everything that has transpired.
Munupi woman Antonia Burke said the group is happy about the court’s decision but will continue to fight the project.
For now, the drill rig Santos hired for the Barossa project remains idle off the coast of Darwin.
“We will keep fighting this until they pack up and go,” Ms Burke said.
“Munupi people don’t want any fossil fuel activities off the coast line of the Tiwi islands.
“There are other environmental plans that have been submitted to NOPSEMA for this project so we will work with our legal teams to review those environment plans.”