The company operates the Puffin oilfield joint venture and has recently finished an extensive evaluation of AC/P 22.
This confirms earlier reports that the company was set to give up the licence.
Joint venture partner AED Oil announced that in the absence of any real exploration targets that would produce economic outcomes, the permit should be relinquished.
All of the partners and administrators have supported the relinquishment.
Drilling of a well, which was mandatory as part of the work commitment for the permit, will now not go ahead because of the relinquishment.
Oil production from the Puffin oilfield stopped in May 2009 and a review of the status of the licence is required within five years.
Seven wells will be abandoned in water depths of between 75 metres and 104 metres.
The Puffin-7 and Puffin-8 wells – which are understood to be first in line – are currently in a suspended state with all control and safety valving closed.
The next five wells were temporarily suspended with wellheads in place but no subsea christmas trees or completion strings.
Sinopec bought a 60% equity stake in the field from AED Oil in June 2008 for A$600 million ($563 million).