The review recommends a ‘tracking responsibility’, in which owners remain for de-dismantle sites after promoting them
Last modified August 10, 2020 14.03 BST
Energy giant Woodside Petroleum will pay more than $200 million to clean up a dying oil production site in the Timor Sea after the government reviewed former offshore service owners responsible for recovery costs.
Woodside operated the oil production vessel Northern Endeavour, which permanently moored about 550 kilometres northwest of Darwin from 1999 to 2016. He announced the closure of the siege, but then paid $24 million to the newly formed Northern Oil and Gas Australia (Noga) group. take control.
After 3 years of discontinued production, the national protection regulator ordered the paints to be stopped in July 2019, warning that corrosion in the area can cause “multiple deaths”. The closure led to the voluntary management of To Noga in September and liquidation in February.
While the ship was in Commonwealth waters, Morrison’s government was forced into interfering to ensure some protection at the site. He signed a contract with Upstream Petroleum Services for the ship and potentially assumed a duty of dismantling and recovery, which Woodside said can reach $230 million.
The government commissioned a review of the cases that led Noga to input management by British offshore regulation expert Steve Walker. In a report released Thursday, Walker noted that Woodside had announced plans to end production in late 2016 and begin dismantling some time later, before signing an agreement with Noga.
He advised the government to introduce a “leak responsibility” in which owners of offshore production sites would continue to be guilty of dismantling and removal after they have been sold, and whether the replacement deserves to be applied retroactively. He also warned that corporations deserve to be required to provide a monetary guarantee to cover the costs of dismantling.
Resource Minister Keith Pitt said officials in his dismantling would review Walker’s recommendations as a component of a review of dismantling requirements. He said the government works with the oil and fuel industry on “cost recovery options” in Northern Endeavour.
Tim Beshara, the federal policy director of the Wilderness Society, said the government will urgently introduce liability legislation “to protect the taxpayer from additional debacles like this.” A new oil and fuel progression will not be approved until an industry-wide audit of the threat of responsibility has been conducted and new legislation has been established, he said.
“The right thing for Woodside here is to write a check to the Australian taxpayer,” he said. “It is clear from this report that the mess began when Woodside unloaded his rust cube in a company whose history has shown that he cannot satisfy the day-to-day jobs Woodside promised to satisfy.”
Beshara stated that the Wilderness Society believed that the Northern Endeavour case, which he described as an “end-of-life asset discharge,” was not an anomaly. “We think it’s a business style for the industry,” he said.
A Woodside spokesman said the company had signed a contract with the government to assist in a “demantling framing study” on the site and also contribute to political discussions “to ensure that such conditions do not happen again.”
He didn’t settle for being guilty of the cleanup. “The sale and transfer of northern Endeavour to Noga was carried out very well in accordance with Australian law and regulations,” the spokesman said. “From Woodside’s perspective, it was vital that the correct precedents were set and that existing holders were convicted of maintaining the operating assets.”
Environmentalists and industry agree that dismantling is an imminent challenge in the oil and fuel sector. A recent report through the oil and fuel industry group, the Australian Oil Production and Exploration Association, written through experts Wood Mackenzie, found that operators are expected to dismantle more than 65 offshore platforms and avoid production of seven floating services until 2026. The estimated charge around $70. billions in 30 years.
The report reads: “To date, unclear regulations, a developing jurisdictional hole and a strict environment have minimized effective dismantling.
The association’s executive leader, Andrew McConville, told Guardian Australia that it did not leak responsibility, and that the problems highlighted through Northern Endeavour’s amusement can be solved with other measures. This included making sure that the de-state regulations were as adequate as necessary and that regulators had the resources they needed. He said corporations that specialize in buying expired assets in life have a vital role to play in making sure they are fully used.
On the Northern Endeavour, McConville said: “It’s a very unfortunate set of cases and the industry actually wouldn’t want anything like this to happen again, because it’s not smart for anyone. We want the regulatory scenario to ensure that this is not the case. “
The global oil and fuel industry collapsed this year. Wood Mackenzie estimates that $1.6 billion has been removed from the sector as a result of Covid’s recession, with Saudi manufacturers flooding the market and investors to move away from fossil fuels.