Victoria introduces new regulatory framework for underground petroleum storage in the Victorian offshore area

On 7 May 2026, the Offshore Petroleum and Greenhouse Gas Storage Amendment Regulations 2026 (the Amendment Regulations) introduced a new regulatory framework for underground petroleum storage operations in Victoria's offshore area.

These amendments are a significant development in the regulation of energy storage activities offshore Victoria, and will be of particular interest to petroleum production licensees considering, or currently undertaking, the injection and storage of petroleum in natural reservoirs for later recovery.&

Background to Victoria's underground petroleum storage regime

The Amendment Regulations were made under section 794 of the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (Vic) (the OPGGS Act (Vic)) and amend the Offshore Petroleum and Greenhouse Gas Storage Regulations 2021 (the OPGGS Regulations (Vic)).

The Offshore Petroleum and Greenhouse Gas Storage Amendment Act 2024 (No. 42/2024) introduced the concept of "underground petroleum storage" into the OPGGS Act (Vic). Underground petroleum storage is defined as the injection into, and storage of, petroleum in natural reservoirs from which petroleum was previously recovered for the purpose of later recovering it, the recovery of petroleum from such a reservoir, and any activity incidental to those activities.

This Act also inserted section 149A into the OPGGS Act (Vic), which prohibits a person from intentionally carrying on underground petroleum storage operations in the offshore area unless authorised by a petroleum production licence or otherwise authorised or required by or under the OPGGS Act (Vic), with a penalty of five years' imprisonment.

Section 150(1) of the OPGGS Act (Vic) confers on petroleum production licensees the right to, amongst other things, inject into and store petroleum in natural reservoirs from which petroleum was previously recovered in the licence area for the purpose of later recovering it, and to recover petroleum so injected. Section 616 of the OPGGS Act (Vic) requires licensees to carry out all underground petroleum storage operations in a proper and workmanlike manner and in accordance with good oilfield practice.

Until the commencement of the Amendment Regulations, however, there was no detailed subordinate legislative framework prescribing the specific requirements for how underground petroleum storage operations are to be planned, approved, monitored and reported. The Amendment Regulations fill this gap.

Storage development plans (New Part 5.4A)

The Amendment Regulations introduce a new Part 5.4A into the OPGGS Regulations (Vic), establishing a new regime for storage development plans (SDPs) withe these key features;.

1. Requirement to have and comply with an accepted plan. A petroleum production licensee must not inject petroleum for storage in a natural reservoir in the licence area for the purposes of later recovering it unless there is an accepted SDP in force for the relevant field. A licensee must also not carry on an activity in a field that is not consistent with the accepted SDP in force for that field.

2. Application and acceptance process. A petroleum production licensee or an applicant for a petroleum production licence may apply to the Minister to accept a SDP. After receiving the plan, the Minister must accept, reject, or notify the person that further assessment is required, specifying any further information needed and the date for further assessment. The Minister may accept the plan subject to conditions.

3. Criteria for acceptance. The Minister must accept a SDP if satisfied that it includes the required content and demonstrates that the person will carry on underground petroleum storage operations in a manner consistent with good oilfield practice and compatible with the safe and optimum storage of petroleum and recovery of stored petroleum.

4. Required content. A SDP must address a broad range of matters including a description of each stage of the operation, geological data, remaining recoverable petroleum reserves prior to commencement of underground storage, details of petroleum pools for storage, an evaluation of the suitability of the field and seals, the proposed storage operating volume, containment monitoring methods, interaction with nearby petroleum or greenhouse gas operations, measures for containment, injection and recovery timelines, project schedules, and record-keeping arrangements.

5. Variation of plans. A licensee must apply to the Minister to vary an accepted SDP if it intends to make a "major change" to underground petroleum storage operations, there is a new licensee for the licence (unless the new licensee agrees to operate in accordance with the SDP), or the Minister has requested the variation. The Amendment Regulations define "major change" broadly to include matters such as permanent or long-term cessation of operations before the planned date, introduction of new methods for storage operations that are not otherwise provided for in the SDP, expansion of operations, changes to the source or composition of injected petroleum, changes in pool or field management strategy, or commencement of operations in an unapproved petroleum pool.

A licensee must not make a major change unless it has applied for a variation at least 180 days before the occurrence of the major change.

The Minister must accept, reject, or notify the licensee that a further assessment is required, specifying the further information needed and the date for further assessment. The Minister may accept the varied SDP subject to conditions. In the case of accepted variations, the varied SDP is then in force for the licence area as at the date of commencement of the variation.

6. Minister-initiated variation. The Minister may require a licensee to vary a SDP by written notice setting out technical grounds and a proposed submission date. A licensee may object (on the grounds that the variation should not occur, should be in different terms, should take effect at a later date, or that the date by which the licensee must submit the variation be later) within 21 days (or a longer period if allowed), and the Minister must then accept or reject the objection and notify the licensee of either the new requirements, or reasons for rejection.

Injection and recovery rate approvals (Division 5)

A petroleum production licensee must obtain written Ministerial approval of both the rate of injection of petroleum and the rate of recovery of stored petroleum before undertaking either activity.

Applications for approval must include detailed technical information, including the proposed rates, past and predicted well performance (if any), expected maximum storage capacity at the end of the injection period, predicted remaining capacity, and buffer or spill-point safety margins. The Minister must ensure that any approved rate is consistent with the accepted SDP for the relevant field.

Notification and reporting obligations (Divisions 6 and 7)

The Amendment Regulations impose two distinct notification and reporting regimes:

2. Significant events. A licensee must provide written notification to the Minister of a significant event within seven days of becoming aware of it. "Significant events" include changes in understanding of geological or reservoir characteristics that may have a significant impact on injection or storage activities, new or increased risks to petroleum injection or storage within or outside the licence area, and any failure or anomaly in monitoring systems. The notification must include all material facts and the action the licensee proposes to take in response.

3. Reportable incidents. Licensees must orally notify the Minister of a "reportable incident" as soon as practicable (and in any case within two hours) after the occurrence or detection of the occurrence (if not previously detected) and must subsequently provide a written record. "Reportable incidents" include fluid migration inconsistent with the accepted SDP, significant deviation from predicted pressure or fluid behaviour, and activation of a critical threshold or trigger level. The initial oral notification must contain all material facts and circumstances known (or able to be known by way of reasonable enquiry) and corrective actions taken or proposed. A written report must follow within three days (or such other period as the Minister specifies), containing all material facts and describing corrective actions taken or proposed. The Minister may also require additional written reports.

Additional requirement for annual title assessment report (Part 6)

The licensee is now required to provide the total amount of petroleum injected into, and recovered from, each field within the licence area as part of the information in the annual title assessment report.

Comparing field development plan (FDP) requirements (Part 5.4) and the new storage development plan (SDP) requirements (Part 5.4A)

• Triggers and scope: FDPs are required before recovering petroleum from a pool (subject to appraisal or short‑term permissions) and activities must align with the accepted FDP; SDPs are required before injecting petroleum for storage (for later recovery) and activities must align with the accepted SDP.

• Acceptance tests: FDPs must demonstrate pool management consistent with good oilfield practice and compatible with optimum long‑term recovery; SDPs must demonstrate underground petroleum storage consistent with good oilfield practice and compatible with the safe and optimum storage of petroleum and recovery of stored petroleum.

• Core content: FDPs focus on evidence of petroleum, reserves, development and pool‑management strategy, extraction plans, schedules, enhanced recovery and related monitoring/records; SDPs add storage‑specific elements including field/seal suitability, storage operating volume, containment monitoring and trigger levels, interactions with petroleum and GHG operations, and control systems.

• Variation lead times: For “major changes”, FDP variations must be lodged at least 90 days before the change, whereas SDP variations must be lodged at least 180 days before the change.

• Rates: FDPs require approval of the rate of recovery from a pool; SDPs require approval of both the rate of injection and the rate of recovery of stored petroleum, with additional storage‑specific inputs (eg., capacity and buffer/spill‑point margins) and consistency with the accepted plan.

• Reporting: Both regimes require written notice of “significant events” within even days; SDPs add a “reportable incident” regime requiring oral notice within 2 hours and a written report within three days (plus any follow‑ups).

The greenhouse gas injection and permanent storage regime is addressed under a separate regulatory framework regime.

Comparing the Commonwealth regime under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) and Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2025

The Victorian regime requires an accepted SDP and separate Ministerial approvals for the rate of injection and rate of recovery for underground petroleum storage in State coastal waters, with at least 180 days’ lead time for major changes and an expedited incident‑reporting regime.

By contrast, the Commonwealth regime requires FDPs and approval of rates of recovery for petroleum but does not establish a dedicated framework for petroleum that is reinjected and stored for later recovery nor require a petroleum "rate of injection" approval.