New South Wales Premier Mike Baird has not rule out extending Metgasco’s drilling licence in the state’s north, after a court overturned the State Government’s attempt to suspend it.
In April, the Supreme Court lifted the suspension of the gas company’s licence to drill a test well at its Rosella site near Bentley.
The suspension was imposed a year ago amid allegations of inadequate community consultation.
But the court found the Government had acted improperly, overturning the decision and awarding costs to Metgasco.
The Government has now confirmed it will not appeal against the court ruling, but Metgasco has pushed for an out-of-court compensation settlement and a possible four-year licence extension.
It also wants police protection at the drilling site at Bentley, which has previously been hindered by months of protests and blockades.
Mr Baird said the Government is in talks with Metgasco, but will not confirm what options are on the table.
“I’m not going to rule anything in or out now,” Mr Baird said.
“What I will be saying is we are happy to negotiate directly with them.
“We have a buyback scheme that sits there across the state at the moment and we are talking to all players about that.”
Metgasco’s managing director, Peter Henderson, said the Government’s decision not to appeal came as no surprise.
“We had a very strong court position,” he said.
“Had the Government appealed the decision, it would have sent a terrible message to industry in New South Wales and would also have wasted public funds.
“We were confident that had it been taken to appeal, we would have won again.”
Reports Metgasco would move on are ‘speculative’
Mr Henderson said Metgasco still hoped to negotiate an out-of-court compensation settlement for the damage during the 11-month suspension of the Bentley licence.
He said reports that suggested Metgasco would now sell up and move on for $80 million were speculative.
Protesters at Metgasco’s Bentley site celebrating suspension of gas drilling
Photo A lot can happen in a year. Protesters at Metgasco’s Bentley site celebrate the suspension of a gas-drilling licence. That decision has now been overturned, and no appeal will be lodged by the State Government.
ABC: Margaret Burin
“There are some people who could argue that the gas we’ve had certified is worth a whole lot more than that,” Mr Henderson said.
“We’ve spent $120 million and many people would argue that if the Government didn’t want us to continue exploring, particularly after we’ve done the right thing year after year, then $120 million is the right figure.
“The $80-million figure is the capitalised amount that we wrote off our books last year.”
Mr Henderson said a majority of the company’s 5,000 shareholders would have to agree before any offer could be accepted.
“I think if you did a survey of our shareholders you would find a very strong preference for us to do what we were set up to do,” he said.
“Which is to explore for gas, find it and develop it for New South Wales and for our shareholders.
“That’s exactly what we intend to do.
“We’d like to drill [Bentley], we’d like to continue exploring in the area and we’d like to produce gas.”
Government appeal would have ‘wasted money’: Industry
Industry opponents Gasfield Free Northern Rivers spokesman said another court case would have been a waste of money.
Aiden Ricketts said the Government should instead change the legislation which controls the industry.
“What we said since the day we walked out of the court room is ‘don’t bother appealing it, that will just waste taxpayers’ money and get us caught up in pure technicalities under the existing legislation’,” Mr Ricketts said.
“What we need to do is bring back the public-interest test for the cancellation and suspension of licences and approvals.
“Then the Government will effectively have control of the industry again.”
Mr Ricketts said there is speculation about massive compensation payouts.
“I would find it offensive if taxpayers’ money is spent on bailing out speculative companies in this way,” he said.
“I think the Government needs to get control of the industry, and then go back into the negotiation room with Metgasco.”
New South Wales Energy Minister Anthony Roberts has so far declined to comment.