1. What is the current legal landscape for your practice area in your jurisdiction?

Australia’s oil and gas sector is operating in an environment shaped by the intersection of energy security, geopolitical dynamics and domestic regulatory recalibration. Recent global developments have highlighted the continued strategic importance of oil and gas to both economic stability and the energy transition and continue to underscore the role of LNG in supporting regional energy demand, particularly across Asia.

Australia remains a globally significant LNG exporter, accounting for approximately 20% of global supply, which outweighs its share of global gas reserves. This reflects the strength of Australia’s project development capability, infrastructure base and proximity to key demand centres. At the same time, domestic energy security has become a central policy priority, prompting a more interventionist regulatory approach to gas supply.

The legal landscape is complex and there is persistent regulatory uncertainty. Oil and gas projects in Australia must navigate a multi-layered regulatory regime, with distinct Commonwealth and State systems, and separate onshore and offshore frameworks. In practice, this often results in overlapping approval pathways and a high degree of jurisdiction-specific complexity.

A central area of focus is east coast gas market reform. The Commonwealth has signalled a move away from short-term intervention mechanisms towards a ‘simple’ 20% domestic gas reservation framework from 1 July 2027. Uncertainty remains around the detail of how this will be implemented — including grandfathering of existing contracts, third party supply exceptions, the interaction with the WA domestic gas policy, flexibility within and between years, and how obligations will apply across different project structures and portfolios.

Environmental approvals continue to be a critical constraint on project development. Although reforms to the EPBC regime are intended to improve efficiency and provide clearer standards, the practical experience for proponents remains one of extended timeframes and procedural complexity. In addition, litigation and stakeholder challenge risk is now an inherent feature of the approvals process, with recent major projects demonstrating that legal risk does not end at the point of regulatory approval.

These pressures have contributed to a period of reduced exploration activity and more disciplined capital allocation. However, the market is now showing signs of renewed activity, with portfolio rationalisation creating opportunities for increased M&A and the entry of new forms of capital. We are also seeing new project structures being utilised in the sector, including the split of upstream assets from midstream and downstream assets to facilitate new categories of investors, the development of LNG import infrastructure on the east coast, and the emergence of carbon capture and storage (CCS) as a complementary pathway for project development.

Overall, the Australian market is highly regulated and suffering from long term policy uncertainty.

2. What three essential pieces of advice would you give to clients involved in your practice area matters?

1. Plan for ongoing regulatory evolution, not regulatory stability.

Australia’s oil and gas sector continues to evolve as governments respond to energy security, affordability and transition pressures. While the direction of policy is becoming clearer, the detail and application of that policy remains subject to change. Clients should factor regulatory evolution into all aspects of project development and investment, including valuation, financing and contracting structures.

2. Take a conservative and integrated approach to approvals and timing.

Approval processes in Australia are complex, multi-jurisdictional and often non-linear. Estimates for the time required and the level of coordination needed across Commonwealth and State regimes can be underestimated. Stakeholder engagement and the risk of legal challenge should be treated as core components of project planning, rather than contingent risks.

3. Embed flexibility in asset structuring and investment models.

The sector is increasingly characterised by evolving ownership structures, including the separation of upstream, midstream and downstream assets and the entry of infrastructure and private capital investors. Clients should consider early how best to structure assets and transactions to manage regulatory exposure, enable future flexibility and address long-term obligations, including decommissioning and environmental liabilities.

3. What are the greatest threats and opportunities in your practice area law in the next 12 months?

The most immediate challenge facing the sector is regulatory uncertainty.

While the shift toward a long-term domestic gas reservation framework provides greater clarity of direction, unresolved design elements continue to influence investment decisions, pricing and contractual arrangements. This uncertainty exists in a context where energy security has never been more important.

A second key constraint is that approvals reform has not yet translated into materially faster or simpler project delivery outcomes. Proponents must continue to navigate complex regulatory pathways and the ongoing potential for litigation and stakeholder challenges, which can materially impact project timelines and economics.

Australia’s decommissioning regime is also undergoing reform, which is being closely followed by industry given the vast amount of decommissioning activities forecast in the next 50 years in Australia.

When viewed in an international context, developing projects in Australia is seen as expensive, and exposed to risks of regulatory change given energy policy uncertainty over many years.

However, Australia is still considered a reliable jurisdiction in which to develop projects, and has world-class reserves and expertise. The movement of capital to the US has also given rise to significant market opportunities. Portfolio rationalisation by established players is driving sustained M&A activity, with a widening pool of bidders. The increasing disaggregation of oil and gas assets is creating new investment opportunities in midstream infrastructure, including in LNG processing and pipeline assets, which offer more stable, long-term revenue profiles.

In addition, CCS is emerging as a key area of growth, with early-stage projects gaining momentum. Australia is well positioned to develop large-scale CCS capability, leveraging existing expertise in subsurface geology and offshore regulation. These projects have the potential to support both domestic emissions reduction objectives and future cross-border CO₂ management.

Looking ahead, the sector is likely to be characterised by continued legal and regulatory complexity, but with stronger strategic alignment between policy objectives and industry activity, creating opportunities for well-advised participants.

 4. How do you ensure high client satisfaction levels are maintained by your practice?

Allens maintains high levels of client satisfaction through a combination of deep sector expertise, asset-specific experience and a strongly commercial approach to legal advice.

Clients value advisers who understand not only the legal framework, but also the practical realities of developing, acquiring and operating oil and gas assets in Australia’s complex regulatory environment. Our experience spans major onshore and offshore developments, complex approvals processes and high-value transactions, enabling us to anticipate issues early and provide advice that is both technically robust and focused on execution.

This capability is particularly important for international investors and new entrants, who often face a steep learning curve when navigating Australia’s regulatory system. Our ability to guide clients through those systems, regulator expectations and stakeholder dynamics provides a high degree of certainty in an otherwise complex environment.

We also maintain client confidence by evolving alongside the market. As the sector shifts towards new investment structures, infrastructure-led models and CCS-related opportunities, we support clients with innovative and commercially effective solutions. Our experience, adaptability and practical insight underpin long-standing client relationships across the oil and gas sector.

5. What technological advancements are reshaping your practice area law and how can clients benefit from them?

Technological advancement is reshaping the oil and gas sector in two distinct but closely connected ways: through changes in the underlying industry, and through the evolution of legal and advisory delivery in support of that industry. Together, these developments are enabling clients to better manage risk, unlock new opportunities and operate more effectively.

The growth of AI and digitalisation is transforming asset operations, which is resulting in enhanced compliance, reporting and operational oversight. From a legal perspective, this is changing how obligations are tracked and demonstrated, enabling a more proactive and data-driven approach to regulatory engagement and risk management.

At the same time, technology is fundamentally changing how legal services are delivered in support of these developments. The use of AI allows us to provide legal services which are better, quicker and faster, as we can process large amounts of information in short periods of time, and then refine the outcome of that analysis based on our legal expertise and extensive experience. In a sector where documentation is extensive and highly interconnected, these tools improve consistency, reduce inefficiencies and allow legal teams to focus on higher-value strategic issues and negotiation outcomes.

Allens is also integrating AI-assisted research, knowledge management and regulatory tracking tools into its practice to support more responsive and forward-looking advice. This capability is particularly valuable in an environment where regulatory frameworks and policy settings continue to evolve, enabling clients to receive timely, informed and commercially grounded guidance at critical decision points.

Taken together, these technological developments are enabling a more integrated, data-informed and execution-focused approach to oil and gas projects and transactions. For clients, this means not only improved efficiency, but also a stronger ability to navigate complexity, manage regulatory risk and capitalise on emerging opportunities in a rapidly evolving market.