A company part-owned by mining magnate Gina Rinehart has lost its $2.7 billion court case against the Victorian government over the state's ban on gas exploration.
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The Supreme Court in Melbourne on Friday rejected claims by oil and gas company Lakes Oil that the government’s state-wide moratorium on “onshore petroleum” exploration was unlawful.
Lakes Oil was seeking damages for $92 million it had already spent, plus more than $2.6 billion in lost future earnings, after being prevented by the ban from using six permits it owned to explore for gas in Gippsland and the state’s south-west.
The company first went to court in 2016, after the Andrews government slapped its ban on fracking and all exploration and development of unconventional onshore gas.
The company said the state deprived it of the use of its exploration permits "for the purpose for which they were intended" and wanted damages for losses suffered as a result of then-Resources Minister Wade Noonan's conduct.
Lakes Oil’s argument to the court was that the state government’s conduct was "unjust and unlawful".
The Andrews government banned fracking and all exploration and development of unconventional onshore gas in 2016, drawing praise from environmental groups.
At the time, Premier Daniel Andrews said the government had listened to the community and decided to put "farmers and our clean, green brand first".
The legislation permanently bans all onshore unconventional gas exploration and development, including fracking and coal-seam gas.
It also extends the moratorium on conventional onshore gas exploration and development, first introduced by the Napthine Liberal government, to 2020.
Lakes Oil chairman Chris Tonkin said he would seek advice from the company’s lawyers about the judgment.
"There’s nothing wrong with conventional drilling," he said. "It does no damage."
Mr Tonkin said the company had wanted to discuss the dispute directly with the government.
"This is something we could have and should have resolved with the government except we didn’t have the opportunity to do that."
Resources Minister Tim Pallas praised the court’s decision on Friday.
"We welcome the court’s decision to uphold our ban on fracking in Victoria - protecting our state's clean and green credentials," Mr Pallas said.
