CoAG issued a communiqué this week from a meeting in Adelaide, agreeing that the Productivity Commission report back by April 2009 with its findings.

APPEA (Australian Petroleum Production & Exploration Association) said the announcement was a sign that the nation's leaders were committed to creating a more cooperative approach to regulation and project approvals.

"The oil and gas industry welcomes today's CoAG outcome because for far too long oil and gas projects have suffered at the hands of competitive federalism," APPEA chief executive Belinda Robinson said.

"The length and complexity of the multi-jurisdictional approvals processes and the delays and costs that this is placing on exploration, development and production decisions, both in offshore and onshore areas, is a real dampener on our industry delivering maximum benefits to Australia."

Robinson said this was just as important a problem for smaller explorers and producers with fewer resources, which can spend up to five years navigating their way through 150-500 approvals.

"We are seeing an increasing trend of small to medium Australian companies spending capital overseas that they have raised in Australia because it is easier," she said.