Oil, gas drilling permit off NSW refused

Prime Minister Scott Morrison on Thursday confirmed the government would refuse the application.

"This project will not proceed on our watch," he said.

"Gas is an important part of Australia's current and future energy mix, but this is not the right project for these communities and pristine beaches and waters.

"From Newcastle through to Wollongong, my government has listened to the concerns of local Liberal members and candidates and their communities and we're putting our foot down."

The NSW government and National Offshore Petroleum Titles Administrator were informed of the federal government's decision.

Labor frontbencher Pat Conroy said it was a victory for local political leaders.

"Particularly the independents and the Labor Party who have been dead opposed to this from day one," he said.

Surfers for Climate Action co-director Belinda Baggs has campaigned against the project and is relieved.

"I thank the federal government for listening to our calls and having the sense to make a decision that will benefit the people who live along this coast and keep this pocket of fossil fuels underground," she said.

"Most surfers don't want their beaches destroyed for a polluting fuel we no longer need. It's clear the tide is changing and we will continue kicking gas out of our line-ups."

Advent Energy and Bounty Oil and Gas had sought a renewal of the exploration licence and permission to undertake exploratory drilling in the area primarily within Commonwealth waters.