The Federal Government will rule out the possibility of banning exploration in Western Australia despite that several conservationists are angry over the continuance of oil drilling at Margaret River in Western Australia.

Resource Minister Martin Ferguson said the government will not allow shutting down oil and gas industry, however, it will provide safety and environment protection regulations in the area.

A spokesperson for Minister Ferguson said the Margaret River will be evaluated as a marine reserve, but that will happen within the framework of existing oil and gas leases.

Earlier, the Conservation Council spokesperson Tim Nicol contested the decision to allow exploration in one of Australia's surfing areas.

“Margaret River is an icon in Western Australia of our clean, green environment both on land with the wineries and the forest and then the ocean with our great West Australian seafood and our beautiful clean beaches and our surfing lifestyles,” he said.

“To slap an oil lease in a proposed marine sanctuary just right off the coast of Margaret River is a big thing for Western Australia.”

Mr. Nicol added that companies may reconsider its exploration in the lease area once the public air out its grievances over the project.

Mr. Nicol also explained that WA's south-west consists of more than 90 per cent unique marine life than in Great Barrier Reef. He added that whales and dolphin species also dominate the area.

Mr. Nicol stressed out that oil spills in the ocean will create a negative impact into the marine environment, affecting the marine species.

"A spill of that size in the south-west would see oil from Perth right through to Margaret River,” he said.

Meanwhile, a coalition of environment groups are working on a network campaign on marine sanctuaries to be established off Australia's coastline.