The Australian Competition and Consumer Commission has granted conditional interim authorisation to Santos and ten other oil producers to jointly market their oil produced in the Surat Basin and Denison Trough in Queensland.
The oil producers will now be able to execute an Oil Marketing Agreement and sales agreement with Caltex. Interim authorisation is conditional upon any sales agreement entered into containing a provision that the agreement will immediately terminate should final authorisation not be granted by the ACCC.
The producers currently transport oil from the Surat Basin to the Lytton storage facilities in Brisbane. Oil production from the Surat Basin represents a very small proportion of total oil production in Australia (around 0.3 per cent).
The decision to grant interim authorisation maintains the status quo for the industry while the ACCC continues its public assessment of the arrangements. The ACCC considered that a decision to deny interim authorisation could disrupt oil production in the region.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. Interim authorisation allows the parties to engage in the conduct prior to the ACCC considering the substantive merits of the application.
More information regarding the application and granting of interim authorisation, including the reasons for the ACCC's decision, will be available by following the Public registers link on the ACCC's website: www.accc.gov.au.