METGASCO has threatened to continue legal action against the New South Wales Government after its move to suspend drilling approval for the Rosella well to the Supreme Court.

The company’s drilling licence was suspended in May by the NSW Office of Coal Seam Gas (OCSG) after it found the company had not carried out genuine consultation with the local community – of Bentley in NSW.

Metgasco requested a government review of the OCSG decision, which was taken in June, NSW Resources Minister Anthony Roberts said.

“The outcome of the review is that the decision to suspend the operations of Metgasco under the Activity Approval remains in place until the OCSG is satisfied that the company has met the conditions of its title and the conditions of the Activity Approval,” a ministerial announcement said.

Metgasco said it was “very disappointed” with the decision, adding that it had agreed to suspend legal action against the decision to allow for the review to take place.

“Metgasco believes the original decision to suspend was unlawful, and made without valid justification and rejects the NSW Government’s claim that the company had failed to conduct an appropriate community consultation program,” it said.

“It is reviewing the Government’s decision and reasons for maintaining the suspension. It will continue its legal action if it considers the errors in the original decision have not been addressed.”

Metgasco managing director Peter Henderson accused the NSW Government of failing to defend exploration and investment at a time when the general community is facing a shortage in natural gas supplies.

“The Government should not allow itself to be intimidated by activists making spurious and ill-informed claims about drilling for natural gas when the state is running out of gas and regional areas are crying-out for investment,” he said.

The Australian Petroleum Production and Exploration Association (APPEA) also condemned the decision, saying it set an “alarming precedent for resource development in the state.”

“The decision suggests that protest action is now considered by government and regulators to be a proxy for ‘ineffective’ consultation, and therefore grounds for license suspension,” a release from the group said.

“Industry has always recognised there are people with genuine concerns regarding resource development who are open to consultation, science-based evidence, and reasonable negotiation; and there are others who are not.”

“The NSW Government has encouraged the actions of protesters intent on stopping natural gas production,” it said.