Developing Australia's coal seam gas (CSG) reserves and projects will now go to the highest bidder, Natural Resources and Mines Minister Andrew Cripps said on Tuesday before the 2012 Australian Petroleum Production and Exploration Association (APPEA) Coal Seam Gas Conference in Brisbane.
The Australian state of Queensland's AA1 credit rating has been downgraded from stable to negative by international ratings agency Moody's Investors Service, and is unlikely to revert any time soon to its former AAA rating.
The competitive bidding process, according to Mr Cripps, will not only help develop the industry but also ensure continued exploration activity in Queensland.
The bidding process, however, will only be applicable to reserves considered lucrative. Riskier exploration areas would be exempt from the new policy of the state government of Queensland.
"The move to a highly transparent competitive process will strengthen the stewardship of Queensland's coal and petroleum gas resources and maximise the benefits these resources bring to the people of Queensland," Mr Cripps said.
"The new framework will involve both the controlled and competitive release of land for coal, petroleum and gas exploration and may include a cash bidding process that reflects the potential in-ground value of the resource for certain areas that are released," he said.
The new arrangement, said Mr Cripps, aims to discourage exploration permits being granted and then just compiled and then later on marketed and sold to international buyers but which fail to come up with the proper asking price, either due to lack of geological data or field expertise.
Queensland will release in the next few weeks the first round of petroleum and gas areas available under the new competitive cash bidding process.
The new policy, however, does not involve relaxing the requirements needed to secure environmental licenses and permits.
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