The Federal Court of Australia has rejected Santos’ appeal to resume drilling and completion activities related to its $3.6bn Barossa gas project located offshore Australia’s Northern Territory.

As part of the project, Santos planned to take up drilling activities at a site, located nearly 140kms north of the Tiwi Islands, in the Timor Sea.

In September 2022, Justice Bromberg of the Federal Court set aside approval of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) of the project’s drilling environment plan.

The approval was challenged legally on environmental grounds by landowners from the Tiwi Islands led by Dennis Tipakalippa.

Santos subsequently appealed against the ruling of the single judge. Its appeal was reviewed by the Full Federal Court.

The Australian energy company said that since 2016 it has consulted on the Barossa gas project with traditional owners and their representative bodies. The company plans to continue to consult them, taking into account the guidance given by the Federal Court.

Santos stated: “With a range of cultural heritage and native title agreements across 23 Traditional Owner Groups and six Land Councils around Australia, Santos has a strong track record of working constructively and collaboratively with Traditional Owners.

“Santos has always sought to meet its consultation responsibilities and is continuing the process of revising the Drilling Environment Plan to address the matters contained in the judgement.”

The company said that it will now move ahead with applications for all remaining approvals in line with the court’s guidance.

Santos does not expect any impact on material cost or schedule and stated that first gas from the Barossa gas project continues to be on track and will be achieved in the first half of 2025.

The company took a final investment decision (FID) on the Barossa project in March 2021. The project involves the development of the offshore Barossa gas and condensate field, located 300km north of Darwin.