The Australian Government has granted deep sea drilling permits to BP to explore for oil and gas in 24,000 square kilometres of the Great Australian Bight.
Resources Minister Martin Ferguson says the government has to find another Bass Strait, otherwise the trade situation will worsen.
"It is a tough decision. BP will be held account by the Australian Government," he said.
The minister also said strict new rules will apply.
"The first intention of BP would be to do seismic work in the summer of 2011-2012.
"Even to do that though they'll now have to go through another regulatory process including environmental considerations," Mr Ferguson said.
The ABC reports that special conditions imposed on BP's new permits will be publicly available later this week.