Funds to enable NOPSEMA to deliver its legislated functions will be raised by industry levies in line with NOPSEMA's full cost recovery requirements.

The National Offshore Petroleum Safety and Environmental Management Authority's Cost Recovery Impact Statement (the CRIS) was developed following agreement by the Ministerial Council on Mineral and Petroleum Resources (MCMPR) that NOPSA/NOPSEMA be fully funded by an industry safety fee.

The Government decided that the costs of the Authority would be recovered from industry in line with the Commonwealth Cost Recovery Guidelines for Regulatory Agencies and the charges have been set accordingly.

Cost recovery is accomplished through a system of levies on operators. Guidance on safety case levies is provided. The levies and remittal flowcharts provide an overview of the decision making for levies and remittals.

Periodic reviews of the cost recovery framework are conducted by the Government. The Department of Resources, Energy and Tourism conducted a review in 2008 and has published the Review of Cost NOPSA Recovery Arrangements and Cost Recovery Impact Statement 2008.

An Addendum to the 2008 Cost Recovery Impact Statement (CRIS) was approved by the Minister for Resources Energy and Tourism on 30 September 2010. The purpose of this Addendum is to continue the implementation of staged increases in levies consistent with recommendation 8 of the 2008 CRIS.

Addendum to the 2008 Cost Recovery Impact Statement

NOPSA Cost Recovery Reports

Each financial year, NOPSEMA is required to prepare a financial report that assesses the cost-effectiveness of its operations and present to industry representatives the costs of the operations and budget projections.

Since 2008-2009 the Annual Review of Cost Recovery Arrangements and Financial Report on Cost Effectiveness were placed on NOPSEMA's website together with presentations to industry representatives.

The 2010-2011 report was finalised following the annual meeting with industry representatives on 21 December 2011.

NOPSA Cost Recovery Review Report 2010-2011

NOPSA Cost Recovery Report 2010-2011 Finance Presentation

NOPSA Cost Recovery Review Report 2009-2010

NOPSA Cost Recovery Report 2009-2010 Finance Presentation

NOPSA Cost Recovery Review Report 2008-2009

NOPSA Cost Recovery Report 2008-2009 Finance Presentation

Well Integrity Levies

The Australian Government has recently amended the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGSA), extending NOPSEMAs functions to include the regulation of well integrity. From April 29 this year NOPSEMA took on responsibility as the regulator for the Petroleum (Submerged Lands) (Management of Well Operations) Regulations 2004. It was proposed that Well Integrity Levies would apply to Titleholders who held the relevant permit or licence to conduct well activities and who were responsible persons for ensuring the integrity of wells under the OPGGSA. A presentation was made to Titleholders on Friday 25 February 2011 to commence the consultation with industry on the design and structure of the new levies.

Following the Well Integrity Levies Workshop on 25 February and the associated industry consultation, NOPSEMA finalised a Cost Recovery Impact Statement on well integrity levies which incorporates feedback received. Further information about Well Levies can be found in Parts 4A and 4B of the relevant Act and Parts 8 to 11 of the Regulations.

 

Environment Plan Levies

NOPSEMA has now finalised the Cost Recovery Impact Statement (CRIS) for the introduction of the Environment Plan Levy under the OPGGS (Regulatory Levies) Act 2003. The CRIS was signed by NOPSEMA's Chief Executive Officer and endorsed by the Minister for Resources, Energy and Tourism.

Following workshops with Titleholders, and incorporating their feedback, the CRIS, including all costing and revenue estimates, was vetted and approved by the Commonwealth Department of Finance and Deregulation as being compliant with the Australian Government's Cost Recovery Guidelines.

The unit value to enable NOPSEMA to cost recover has been set at $3,000. Environment Plans accepted by Designated Authorities prior to the commencement of NOPSEMA on 1 January 2012 will not attract a levy for ongoing compliance unless revision provisions of the Environment Regulations are triggered. The details on how the environment plan levy is to be calculated for an Environment Plan submitted to NOPSEMA are contained within the OPGGS (Regulatory Levies) Regulations 2004.

NOPSEMA will monitor, in consultation with Titleholders, the estimated level of activities to be undertaken by Titleholders. The aim is to establish the requisite regulatory effort and to calibrate the unit value as required, along with other aspects of the levy calculation method. This will be formally addressed as part of the statutory annual meeting with Titleholders to review cost-recovery arrangements.