Thai state oil company announced Tuesday it will buy 40% of Statoil’s Canadian oilsands project for $2.3B US
A handout photograph shows the West Atlas oil rig and Montara well head platform on fire before the relief operation to pump heavy mud into the well was completed, off the northwest coast of Australia, in the morning of Tuesday, Nov. 3, 2009.
CANBERRA - Australia plans to tighten regulation of offshore oil exploration and review projects run by Thailand's PTT Exploration and Production after the nation's worst offshore oil spill last year.
An oil rig operated by the Thai company's Australian subsidiary caught fire off northwest Australia in August 2009 and spewed oil and condensate from the Montara wellhead for 74 days before it was stopped.
"Widespread and systemic shortcomings in PTTEP Australasia's procedures were a direct cause of the loss of well control," Resources Minister Martin Ferguson said on Wednesday as he released a report into the spill.
Ferguson's comments sent PTTEP shares 3.6 lower to a more than three week low against a slightly lower broader market.
On Tuesday, the Thai state oil company announced it is buying a minority stake in Statoil's Kai Kos Dehseh oilsands project near Fort McMurray.
The environmental impact of the spill and a leak in the Gulf of Mexico of a well operated by BP Plc have thrown a spotlight on drilling off Australia's coast, with environmentalists calling for a suspension of new projects.
The report blamed PTTEP Australasia for failing to follow safe practices, including having effective fail-safe mechanisms that would have prevented a blowout and fire on the platform.
Only one of two planned secondary well-control barriers was installed, the inquiry found. But it also blamed a minimalist approach by the Northern Territory area regulator, which meant authorities had little chance of discovering poor practices.
The incident caused no deaths, but Ferguson said he had ordered a review of PTTEP's Australian operations which could lead to cancellation of its exploration and development licence.
The review would be completed this year.
"The outcome of this process will assist me in forming a view as to whether the deficiencies in PTTEP Australasia's procedures as identified by the commissioner relate only to the Montara oilfield, or PTTEP's general performance," Ferguson said.
COMPANY SAYS FOLLOWED PLAN
The company operates seven exploration permits, five production licences, seven retention leases and has interests in other permits which it does not operate.
"We're confident that we did everything according to plan," PTTEP chief executive Anon Sirisaengtaksin told Reuters, adding the company was now awaiting the government's assessment of its Australian projects.
Ferguson said he had also accepted an inquiry recommendation that Australia establish a single national offshore exploration regulator, with new legislation setting it up by January 2012.
"Montara was the first major loss of well control in 25 years of safe offshore petroleum operations," he said. "We can't just turn our backs on this industry. It is too important to Australia's economic and energy security."
Environmental group WWF said the oil slick had killed sea life and damaged the fishing industry in neighbouring Indonesia and East Timor.
PTTEP, which on Tuesday announced a $2.3 billion deal to buy into a Canadian oilsands project, is being pursued by Indonesia's government for $2.4 billion in compensation over the spill. The company recorded about $319 million in expenses for the Montara cleanup and rig-damage costs during the second half of last year.
Australia was working closely with the United States in the wake of Montara and the catastrophic blowout on the Deepwater Horizon project in the Gulf of Mexico, Ferguson said, and would hold a conference next year to talk about industry changes.
An oil rig operated by the Thai company's Australian subsidiary caught fire off northwest Australia in August 2009 and spewed oil and condensate from the Montara wellhead for 74 days before it was stopped.
"Widespread and systemic shortcomings in PTTEP Australasia's procedures were a direct cause of the loss of well control," Resources Minister Martin Ferguson said on Wednesday as he released a report into the spill.
Ferguson's comments sent PTTEP shares 3.6 lower to a more than three week low against a slightly lower broader market.
On Tuesday, the Thai state oil company announced it is buying a minority stake in Statoil's Kai Kos Dehseh oilsands project near Fort McMurray.
The environmental impact of the spill and a leak in the Gulf of Mexico of a well operated by BP Plc have thrown a spotlight on drilling off Australia's coast, with environmentalists calling for a suspension of new projects.
The report blamed PTTEP Australasia for failing to follow safe practices, including having effective fail-safe mechanisms that would have prevented a blowout and fire on the platform.
Only one of two planned secondary well-control barriers was installed, the inquiry found. But it also blamed a minimalist approach by the Northern Territory area regulator, which meant authorities had little chance of discovering poor practices.
The incident caused no deaths, but Ferguson said he had ordered a review of PTTEP's Australian operations which could lead to cancellation of its exploration and development licence.
The review would be completed this year.
"The outcome of this process will assist me in forming a view as to whether the deficiencies in PTTEP Australasia's procedures as identified by the commissioner relate only to the Montara oilfield, or PTTEP's general performance," Ferguson said.
COMPANY SAYS FOLLOWED PLAN
The company operates seven exploration permits, five production licences, seven retention leases and has interests in other permits which it does not operate.
"We're confident that we did everything according to plan," PTTEP chief executive Anon Sirisaengtaksin told Reuters, adding the company was now awaiting the government's assessment of its Australian projects.
Ferguson said he had also accepted an inquiry recommendation that Australia establish a single national offshore exploration regulator, with new legislation setting it up by January 2012.
"Montara was the first major loss of well control in 25 years of safe offshore petroleum operations," he said. "We can't just turn our backs on this industry. It is too important to Australia's economic and energy security."
Environmental group WWF said the oil slick had killed sea life and damaged the fishing industry in neighbouring Indonesia and East Timor.
PTTEP, which on Tuesday announced a $2.3 billion deal to buy into a Canadian oilsands project, is being pursued by Indonesia's government for $2.4 billion in compensation over the spill. The company recorded about $319 million in expenses for the Montara cleanup and rig-damage costs during the second half of last year.
Australia was working closely with the United States in the wake of Montara and the catastrophic blowout on the Deepwater Horizon project in the Gulf of Mexico, Ferguson said, and would hold a conference next year to talk about industry changes.
Read more: http://www.calgaryherald.com/business/Australia+rebukes+Thailand+PTTEP+tighten+regulation+after+massive+spill/3878907/story.html#ixzz16HBCZSXH
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