New laws proposed in the wake of the Montara oil spill, dubbed Australia's worst oil disaster, have cleared parliament.
The bill passed on Thursday beefs up the enforcement powers of the national regulator overseeing offshore oil and gas operations.
It also increases criminal penalties for companies that breach certain health, safety and environmental offences.
Under the changes, inspectors from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEA), can enter certain offshore areas without a warrant to make sure standards are being met.
The inspectors can also investigate suspected incidents of non-compliance on offshore rigs with a warrant.
Liberal senator George Brandis said the bill means Australia not only has measures in place to ensure safety and integrity in oil and gas operations, but also assures public confidence in the industry.
"What we saw with the Montara incident was extraordinary," Senator Brandis said.
"While the industry had operated for almost 30 years without incident in Australia public concern had increased."
The Thai state-owned company responsible for the Montara oil spill off the coast of Western Australia was last year fined $510,000 for its actions in relation to the disaster.
During the incident on August 21, 2009, an explosion at a Montara well sent oil and gas condensate spilling into the Timor Sea for more than two months.
The damage saw the event branded Australia's worst oil disaster.
Australian Greens senator Lee Rhiannon, while supporting the bill, urged the federal government to investigate compensation claims made by Indonesian fishermen adversely affected by the spill.
Many had still not been compensated three years after the disaster, she said.
The Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance Measures) Bill 2012 passed with unanimous support.
