Compo crux of land use battle

A Gingin farming couple are locked in a legal dispute with WA petroleum company Empire Oil and Gas over land access and compensation agreements.

Gavin and Sheila Drew allowed Empire Oil and Gas (Empire) to explore for natural gas on a portion of their 1100-hectare property for a two-year period.

At the termination of the agreement in September 2011, the Drews instructed Empire to vacate their land and cease their activities.

Empire then issued the Drews with a legal notice for continued access to their land and for altered compensation rates.

Mr Drew said after the end of Empire's exploration licence, Empire approached him with an insufficient offer of compensation.

"We are asking for the value of the land, plus what they owe us in compensation," he said.

"They are offering us rent to cover the loss of pasture, which would be less than $5000 a year.

"That is about one seventh of what they have been paying us in the past and they want access to two and a half times the land."

Mr Drew said Empire ceased payments in September last year but continued to access his land.

He said the company's initial permit was to access 7.5 acres of his land but the company applied to expand that area to 25 acres.

Lawyer representing the Drews, Philip Brunner, said the purpose of the case was to determine the compensation rate payable to the Drews.

"The matter in the court is a determination as to what is the measure of compensation for the loss of utility of the land," he said.

"Empire has previously paid a certain amount of compensation for exactly the same thing and in this case they are seeking to establish a compensation level that is significantly less than what they were previously paying."

Mr Brunner said there was a provision under the Petroleum and Geothermal Energy Act 1967 for Empire to ask the court to decide the rate of compensation.

"It is certainly an avenue available to Empire under the legislation but other than Empire making the call this year, the court process has not happened for so long that people cannot remember," he said.

Mr Brunner said Empire would also be accused of trespass because it allegedly entered the Drews' property several times after its right to enter the property expired, in late September 2011.

"There was at least one incidence where there was trespass, where Empire entered the land which was not authorised," he said.

Mr Brunner said Empire subsequently made application for a Petroleum Production Licence and a Pipeline Licence pursuant to the provisions of the Petroleum and Geothermal Energy Resources Act 1967 and the Petroleum Pipeline Act 1969, respectively.

He added Empire had breached the terms of its contract by not agreeing to vacate the land and remove its equipment at the cessation of the access agreement.

"The compensation agreement required Empire to remove its property and to rehabilitate the land at the end of the agreement," he said.

"They did neither and now we are going to be seeking orders from the court to force them to do those things."

Empire managing director Craig Marshall said his company had an obligation to the State to produce gas from that parcel of land.

"We just can't sit there and be held to ransom from developing a discovery where we pay royalties to the crown," he said.

"We have no other option but to pursue that and allow another party to set the compensation. We've never had to do anything like this before - we've drilled wells all through the State and have never had to go to the magistrate's court for this."

Mr Marshall denied the accusations of trespass and said the company had ministerial approval to enter the Drews' land.

Department of Mines executive director petroleum Bill Tinapple said the DMP issued Empire Oil and Gas authority to enter the Drews' property in January this year to establish a petroleum pipeline route and processing facility.

"The authority will expire on June 30, 2012, and access is restricted to these purposes," he said.

If the matter is not resolved at the pre-trial conference, scheduled for April 17, the matter will progress to a mention set for April 18.

The matter could progress further, with an additional court date set for May 31.

Given the increase in oil and gas exploration in WA, Mr Brunner reminded farmers to be aware of their rights when it came to mining and petroleum companies.

He said there was a significant difference between the petroleum and mining acts which farmers should keep in mind.

"Under the Mining Act farmers with agricultural land have a right of veto in relation to exploration activities, which means they have the right to say to a potential explorer 'no you do not have permission to enter my land'," he said. "Under oil and gas exploration, that is not the case. A farmer is unlikely to be able to stop the entry of an oil and gas explorer.

"There are things you can do to delay it but in essence you are forced into a position where you need to agree to access for the purposes of exploration."