Published in The Australian by Sarah-Jane Tasker, Reporter, Sydney, March 9th 2015
AGL Energy has sold back a coal seam gas licence to the NSW government because it was not “commercially viable”.
The Australian-listed company said it had taken advantage of the state government’s petroleum exploration licence (PEL) voluntarily buyback scheme, which forms part of the state’s NSW gas plan.
AGL (AGL) said it had deemed that the PEL it was selling back to the government was not commercially viable.
“The majority of the surface area is covered by lakes and mining leases leaving only 10 per cent of the PEL area available for exploration,” Scott Thomas, acting group general manager upstream gas, said.
“AGL’s current geological understanding of PEL 5 indicates that the technical elements required for a successful gas project are not present in the available area.”
AGL has sold PEL 5, which covered an area of 398 square kilometres from Wyong to Morisset.
NSW Premier Mike Baird last week cancelled a coal seam gas exploration licence that covered the majority of the metropolitan Sydney. PEL 463 covered over 189,000 hectares from Bundeena in the city’s south to Rooty Hill in its west and as far north as Gosford.
CSG is set to be a heated topic in the lead up to the state election on March 28, with the opposition promising to cancel or suspend indefinitely coal seam gas exploration licences in the Northern Coast if elected, and to do so without compensation.
Metgasco, which operates in the Northern Rivers region, said the Labor policy increased the growing perception that NSW had serious sovereign risk.
“This can only discourage companies from investing in NSW, and not just in resources, as they know that commitments from government can be overturned at a whim, for political opportunism,” managing director Peter Henderson said.
“Investment requires government that — above all else — can be trusted.”