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Santos pays out after NT fracking battle

Australia’s second-largest independent gas producer Santos and a Northern Territory cattle baron have agreed to end their onshore gas fracking court battle.

The energy company has agreed to pay Rallen Australia’s $400,000 legal bill, reform its stakeholder engagement and stop work at the two controversial exploration wells that caused the legal stoush.

Rallen had accused the publicly listed energy company of having a “cavalier attitude” to government regulations after it allegedly failed to provide full details about its exploration drilling program on Tanumbirini Station, about 700km southeast of Darwin.

The pastoralist claimed Santos withheld information designed to balance the interests of miners and landholders, and misled it into extending access on the 5000 square kilometre station until December 31, 2022.

It said Santos had a duty under the territory’s Petroleum (Environment) Regulations to provide meaningful information about the drilling of two extra wells and the environmental risks associated with them, and that if it had received this it would not have agreed to Santos’ demands.

“It is inconceivable that (the landholder) would have executed the (land access) extension if he had known there were additional environmental risks,” Rallen’s lawyer Marcus Pesman told the NT Supreme Court on Monday, the first day of their week-long court stoush.

The court heard Santos had permission to drill exploration wells at the station but decided it needed to drill two more, which were not included in its environmental management plan.

“Santos’ initial position was that that activity did not require a revision of the EMP,” Mr Pesman said.

“Unfortunately for Santos, the (NT) Department of Environment, Parks and Water Security did not agree.”

The department ordered Santos to lodge an amended environmental plan, saying the new wells posed a “significant environmental risk”.

Santos did this but failed to pass the information onto Rallen as it negotiated its land access extension.

“Any responsible corporate actor, having received this correspondence from the department saying the new activity you intend to undertake contains significant environmental risks, would have communicated those risks to Rallen,” Mr Pesman said.

Santos said it did tell Rallen about its plans in a 96-page disclosure document and any “sophisticated person” would have understood the environmental management plan process.

It also said it complied with the NT regulations but admitted it had been guilty of “inattentiveness to its terms, in respect of that revised (plan)”.

“The second drilling (plan) is publicly notified and when it is drawn to Rallen’s attention, Rallen does nothing,” Santos’ lawyer Jonathan Horton QC said.

“It did not avail itself of the public comment process. It did not make submissions to the minister.”

On Friday, the parties agreed to end their dispute.

“Santos and Rallen have reached agreement to resolve the court proceedings,” a document tendered to the court said.

Under that agreement Santos will continue work at one site on the station, but will cease work on the two contentious wells until after December 2022 and pay Rallen’s $400,000 legal bill.

“Santos will work to improve the way it engages with landholders,” the document said.

“Santos looks forward to a constructive working relationship with Rallen on that basis.”

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