Deepwater drilling off the coast of South Australia: liability for offshore oil and gas pollution

Abstract

In 2011, the Australian Government awarded petroleum exploration permits to BP Exploration (Alpha) Limited and Statoil (Norway) to undertake drilling for petroleum in the Great Australian Bight off the coast of South Australia. As there is always a risk that an oil pollution incident may occur from offshore exploitation, it is crucial that the law adequately addresses issues of liability and compensation for oil pollution. This article examines the laws relating to civil and criminal penalties, liability for clean-up/removal costs, and civil claims made by individuals and entities against the offshore oil company, that may apply in the event of a pollution incident occurring in the Great Australian Bight. The article demonstrates that the law is complex, ambiguous in places and, in particular, provides uncertain and limited rights of recovery for pure economic loss.