Metgasco delays plans to sue NSW government over gas drilling suspension

Metgasco has deferred plans to sue the NSW government over the suspension of its gas drilling licence after doing a deal with the Office of Coal Seam Gas.

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

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. 

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

It said it would look 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.

Metgasco said it would ask the NSW Supreme Court to rule that it had complied with its community obligations.

In an ASX statement today, the company said it brokered a deal with the government which saw it push back the date of the first court hearing from June 13 to June 27.

It said the NSW government had agreed to use its ‘best endeavours’ to make a decision on whether to maintain the suspension of the Rosella drilling approval by June 25.

The government also said it would hand over the documentation used to make its suspension decision by June 20.

Metgasco has previously provided the OCSG with information around its community consultation program but the OCSG decided to maintain the suspension.

The OCSG said drilling could commence after an acceptable community consultation plan is in place.

“The OCSG acknowledges that some sections of the community are opposed to the development of a gas industry for a variety reasons. We do not expect licence holders such as Metgasco to be able to change their view points,” the government department said.

“We do however expect that licence holders such as Metgasco will develop a detailed consultation plan in compliance with the guideline and demonstrate an ability to effectively and genuinely engage with the community.”

Meanwhile, Roberts has been unapologetic in suspending the drilling permit. 

“The government will continue to vigorously pursue titleholders to ensure they maintain high standards of community consultation,” he said in a statement.

The decision came after almost three months of protests by locals who oppose gas exploration activity in the area.

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