Calls for corporate watchdog to investigate fossil fuel companies’ alleged understatement of clean up liabilities

The Australian Securities and Investment Commission (ASIC) has been asked to investigate fossil fuel companies Beach Energy and Amplitude Energy for potentially breaching obligations under the Corporations Act that require companies to present a true and fair view of their financial position.

A letter written by Equity Generation Lawyers, on behalf of their client the Wilderness Society,  alleges that Amplitude and Beach have understated decommissioning liabilities in their 2025 Financial Statements. The letter states that by making the assumption offshore pipelines will be allowed to remain “in situ”, Beach and Amplitude are failing to adequately disclose and account for liabilities potentially worth hundreds of millions of dollars. 

Beach Energy operates offshore oil and gas facilities in the Otway and Bass Basins, while Amplitude Energy has operations in the Otway and Gippsland Basins.

The laws governing offshore oil and gas clean up, contained within the Offshore Petroleum and Greenhouse Gas Storage Act 2006, require all infrastructure, property and equipment associated with operations to be removed once that operation ceases.

The Wilderness Society has also requested ASIC to investigate the conduct of Ernst Young (EY), the audit firm responsible for auditing the accounts of Amplitude and Beach.

The Wilderness Society is concerned that any inaccurate reporting of clean up liabilities, which can be substantial and significant, may fundamentally impact the ability of shareholders to make decisions about their ongoing interest in these companies. 

The Wilderness Society, through Equity Generation Lawyers, has taken the step of referring this matter to ASIC for investigation to ensure Amplitude and Beach have the financial means to clean up their operations at the end of life, to protect the marine environment from infrastructure riddled with toxic contaminants.

Amanda Holly, Corporate Campaigner for the Wilderness Society, said, 

“For Amplitude and Beach to assume they can avoid millions of dollars in clean up costs by abandoning aging pipelines in the ocean is, in our view, fundamentally inconsistent with Australian law. It’s like a kid cleaning their room by shoving mess under the bed.

“Shareholders in Amplitude and Beach need to see the accurate financial state of these companies, not books based on dodgy assumptions that pretend a giant clean up bill isn’t coming down the line.  

“Australia’s oceans are more than resources to be exploited and dumping grounds for decaying fossil fuel infrastructure. They are alive, deeply interconnected, and essential to a healthy climate and future.”

Isobel Blomfield, Senior Associate at Equity Generation Lawyers, said, 

“The scale of decommissioning liabilities in Australia is significant, and these obligations are becoming more pressing as offshore projects wind down.  Shareholders need clear, accurate disclosures about these liabilities, and there is a problem if reporting falls short of what the law and accounting standards require. 

“Our client is concerned that Beach and Amplitude’s 2025 financial reports may not provide a true and fair view of their decommissioning liabilities or comply with the relevant accounting standards, particularly given the assumption adopted by both companies that offshore pipelines can be left ‘in situ’. 

“Our client sees these concerns as part of a systemic issue in the offshore oil and gas sector: companies not facing up to the real costs of cleaning up their projects. This poses significant risk to investors and to taxpayers who may be left footing the bill.”

Earlier this year, the Wilderness Society took Australia’s oil and gas regulator, NOPSEMA, to court alleging it has failed to ensure Santos has set aside enough money to pay for the clean up of its reindeer operations in Western Australia.