Home > Metgasco to pursue legal action over CSG suspension

Metgasco to pursue legal action over CSG suspension

article image

Metgasco is carrying out a legal review of the suspension of its coal seam gas drilling licences in northern NSW, stating that "justification keeps changing" for the suspension.

The energy company's hearing is scheduled for the Supreme Court today.

It comes after NSW Resources and Energy Minister, Anthony Roberts, suspended Metgasco’s drilling licence in May just days before the program was set to commence near Lismore.

Roberts said the Office of Coal Seam Gas (OCSG) had advised him of concerns expressed by local community members about the way in which Metgasco had characterised its activities and that this lead to the suspension.

"I have been advised by OCSG that fundamental concerns have been expressed by members of the effected community about the way in which Metgasco has characterised its activities," Roberts.

Roberts stated the company needed to prove it had undertaken "genuine and effective consultation" with the community.

Roberts also referred  some aspects of Metgasco’s licence to the ICAC “following receipt of information concerning shareholdings and interests” in the company.

Soon after this decision Metgasco filed a judicial review over the decision, claiming the suspension of all activities was unlawful

Metgasco said the decision was not authorised by legislation, and was made without affording it procedural fairness.

It said it was also looking into whether it could sue the government for damages and financial losses sustained as a result of the suspension, expected to amount to $3 million.

According to the company, the review carried out by the OCSG "provided no justifiable basis for its claim that community consultation was inadequate or that Metgasco had failed to honour its approval obligations".

Peter Henderson, Metgasco MD, said "Metgasco strongly believes that it has complied with the OCSG guidelines to community consultation".

"The Company's proposed consultation program was specified in its drilling REF (environmental) application lodged in March 2013 and approved by the OCSG in February 2014.

"The OCSG did not communicate any concerns about community consultation until a few days before the drilling rig was to be mobilised," he said.

"We are also concerned that the justification for the suspension keeps changing; the most recent decision by the OCSG cites new and different reasons to the original 14 May letter.

"The prime reasons for the suspension appear to have little to do with Metgasco's efforts to consult in good faith with the local community, but rather a concern about protests by activists who demonstrably have no interest in consultation," Henderson said. 

"Metgasco would like to work constructively with the government on community consultation as soon as possible but with the government continuing to alter the definition of 'effective consultation' Metgasco has no alternative than to seek court action to protect shareholder interests and have the suspension lifted."

Henderson went on to express concern over the Government's response to Metgasco's legal notice to produce, which was issued by the court.

"To date only a handful of documents have been produced by the Government, all of which were basic licence documents and Metgasco's own documents; this lack of transparency from the Government seems to be inconsistent with Minister Robert's public statements on the need for transparency in government decision making."

He added that this documentation matter will also be raised at the Supreme Court hearing today.

Newsletter sign-up

The latest products and news delivered to your inbox