Timor Sea oil spill: Australia faults Thai-owned firm

Yahoo News 24 Nov 10;

SYDNEY (AFP) – Australia said on Wednesday that a Thai-owned oil firm's "widespread and systematic shortcomings" caused the worst offshore drilling accident in the country's history, which created a massive oil slick.

A government report found PTTEP Australasia failed to observe "sensible" practice at the Montara field in the pristine Timor Sea off Australia's northwest coast, Resources Minister Martin Ferguson told parliament.

"The widespread and systematic shortcomings of PTTEP Australasia's procedures were a direct cause of the loss of well-control," Ferguson said.

"Well-control practices approved by the regulator would have been sufficient to prevent the loss of well-control, however PTTEP Australasia did not adhere to these practices or its own well-construction standards."

The report also criticised the Australian regulator which oversaw the project, saying its "minimalist approach" to its responsibilities gave it little chance of discovering the company's poor practices.

The leak in the Timor Sea from August 21 to November 3 was the worst Australia has seen from an offshore oil platform, although it was smaller than this year's spill in the Gulf of Mexico.

PTTEP Australasia, a unit of Thailand's PTT Exploration and Production PCL, is being pursued for compensation by Indonesia over the Montara slick which environmentalists say grew to almost 90,000 square kilometres (35,000 square miles).


Worst offshore oil spill linked to systemic failure
ABC News 24 Nov 10;

An inquiry into Australia's worst offshore oil spill says the Thai-based owner of the oil well is to blame for the environmental disaster.

Federal Resources Minister Martin Ferguson has tabled in Parliament the report on the August 2009 Montara oil spill off Australia's north-west coast.

Oil and gas flowed uncontrollably into the Timor Sea, about 250 kilometres off the coast, for about 10 weeks, making it the third largest oil spill ever in Australia, and the worst offshore incident of its kind in the country.

The report says the company did not adhere to approved control measures or well-construction standards.

"The inquiry has concluded that PTTEP Australasia (Ashmore Cartier) Pty Ltd did not observe sensible oilfield practices at the Montara oilfield," the report states.

"Major shortcomings in the company's procedures were widespread and systemic, directly leading to the blowout."

Mr Ferguson told Parliament he has accepted the report's recommendation that PTTEP should have its operating licence reviewed.

"The Government is committed to doing everything possible to avoid incidents like Montara in the future and is working to ensure we achieve the best and safest offshore petroleum industry in the world," he said.

"Industry, government and regulators must be absolutely committed to a culture of high safety standards and environmental protection within a framework of continuous improvement."

Mr Ferguson also told Parliament the Northern Territory's Department of Resources failed to adequately regulate operation of the oil well.

"The commissioner found that the Northern Territory Department of Resources was not a sufficiently diligent regulator, adopting a minimalist approach to its regulatory responsibilities," he said.

"The way in which the regulator conducted its responsibilities gave it little chance of discovering PTTEP poor practices."

'Accident waiting to happen'

The inquiry found that PTTEP treated the Northern Territory Department of Resources as if it were a "soft touch".

"In essence, the way that PTTEP AA operated the Montara oilfield did not come within a 'bull's roar' of sensible oilfield practice.

"The blowout was not a reflection of one unfortunate incident, or of bad luck.

"What happened with the H1 well was an accident waiting to happen; the company's systems and processes were so deficient and its key personnel so lacking in basic competence, that the blowout can properly be said to have been an event waiting to occur."

Mr Ferguson said the Montara oil spill should never have happened.

"At the heart of this matter is the failure of the operator and the failure of the regulator to adhere to this regime.

"Montara was preventable.

"If either, or preferably both PTTEP AA or the Northern Territory designated authority had done their jobs properly and complied with requirements, the Montara blowout would never have happened."

Mr Ferguson says the Government will move to have a single, national offshore regulator of the industry.

The Greens Senator Rachel Siewert has welcomed the report and the Government's response.

But she says the Greens are extremely concerned that PTTEP has been allowed to continue operating since the incident.

"We will be pursuing legislative changes that ensure that the Government has the power to make sure that a company that is in this situation cannot continue to operate in our waters for another up to 18 months or longer until a Commission of Inquiry of this nature produces its findings."

Deal coming on Timor oil slick
The Jakarta Post 24 Nov 10;

JAKARTA: Thai-headquartered PTTEP Australasia will respond in writing to Indonesia’s request for damages from an oil spill at the Montaro rig the company operates in the Timor Sea, an Indonesian official says.

“PTTEP will provide a response by Dec. 10, including the steps required to assess and process the claim,” Indonesian negotiator Rosa Vivien Ratnawati said.

Though officials declined to comment, Indonesia reportedly requested US$2.2 billion in compensation for damage from the oil spill.

An agreement on compensation was reached during a meeting between Indonesian and PTTEP officials in Singapore last week.

“The PTTEP will also provide a compilation of data and scientific reports supporting its previous representations made in Singapore,” she said.

Officials from Indonesia and PTTEP are slated to meet again in Jakarta on Dec. 16.

“At the upcoming meeting, experts from Indonesia and PTTEP will discuss scientific evidence submitted by each party,” she said. — JP