If its outside Australia's EEZ there is nothing they can do legally. An illegal military confrontation is the last thing anyone needs. The whole South China Sea issue is over this right to navigate freely outside a EEZ (and that man made islands don't count towards an EEZ)
Those are governed by international agreements and treaties, but if the Continental Shelf extends further than 200 NM (the EEZ) then states still have rights up to 350 NM for mineral and hydrocarbon extraction.
I am not sure what happens further out than 350 NM but I am sure there is some UN agreement on that too. Not sure if any drilling takes place more than 350 NM.
