Oiling the wheels to industry best practice

THREE years after a blowout in the Montara oil field offshore northern WA caused the worst oil spill disaster of its kind in Australian waters, project operator PTTEP Australasia has stepped up to the plate and is ready to move forward with vastly improved safety regulations.
Named Coogee Resources until 2009, PTTEP Australasia is a subsidiary of one of Thailand’s largest publicly-listed companies, PTTEP.
In August this year, the company pleaded guilty to a total of four charges relating to its responsibility for the August 2009 event and was ordered to pay $510,000 in fines by the Darwin Magistrates Court.
During the spill, an estimated 400 barrels of oil leaked into the Timor Sea every day for more than two-and-a-half months. According to reports, however, none of it reached the shores of Australia or Indonesia.
All 69 people on board the West Atlas drilling rig and the Montara wellhead platform were safely evacuated. In comparison, the Macondo field blowout that killed 11 people in the Gulf of Mexico
during 2010 leaked for almost three times as long as Montara and, on average, spilled about as much oil every day as Montara did in total.
In a statement released in August, PTTEP Australasia chief executive Ken Fitzpatrick said that the company had taken a co-operative approach in pleading guilty to all charges. “Mistakes were made that should never be repeated. The conclusion of the court proceedings draws a line under the Montara incident, allowing the company to focus on producing safe and clean operations now and into the future,” Mr Fitzpatrick said.
He added that PTTEP Australasia had taken the charges, and the broader public and industry scrutiny arising from the Montara incident, very seriously.
“We volunteered to the Australian Government within the first few days of the incident to pay for all response and clean-up costs,” he said.
“So far, these expenses have amounted to more than $320 million.
“The company also funds a long-term environmental monitoring program under a separate agreement with the Australian Government.”
Mr Fitzpatrick said that since the spill, PTTEP Australasia had transformed its operations and culture.
While the Montara blowout is a black mark on Australia’s offshore drilling history, the incident – along with the Macondo tragedy – brought the nation’s safety regulations under the microscope. Bodies including the Global Industry Response Group, the Well Expert Committee, and the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) were
established to help prevent any similar incidents from ever occurring. Building on the lessons of Montara On November 3, 2009, PTTEP Australasia reported that it had “killed” the leaking Montara well and stopped the main fire that had been blazing for two days on the West Atlas rig.
About 3400 barrels of heavy mud (a mixture of fluids, solids and chemicals) and 1000 barrels of brine (salt water) were pumped into a relief well drilled by the West Triton rig.
Immediately afterward, PTTEP Australasia began developing a Montara action plan that was reviewed by Australian consultancy firm Noetic Group in late 2010.
According to PTTEP Australasia, the review found that the action plan had set the company “on the path to achieving industry best oil field practice and good governance”.
The plan focused on short, medium and long-term measures to embed the lessons and sustain the learnings from the incident in four key areas: governance; organisation and capability; technical systems; and safety, security, health and environment, culture and management.
As a result, PTTEP Australasia has introduced a new system that requires all business functions to be reported directly to the chief executive.
In addition, the company has implemented a line-of-sight process to monitor the status of critical barriers, to prevent major incident events. According to PTTEP Australasia, this provided management with “visibility on integrity issues” and enabled quick intervention.
“Our aspiration is to be a trusted, open and respected operator in the Australian oil and gas industry…[so] we have made comprehensive changes that are recognised by the Australian Government towards achieving that goal,” Mr Fitzpatrick said.
Montara Commission of Inquiry
To determine the causes of the Montara blowout and what should be done to prevent similar incidents in the future, the Federal Government launched the Montara Commission of Inquiry. Published in November 2010, the report from the inquiry stated that the root causes of the blowout were: a failure to maintain and verify two well barriers; poor management of change control;
and lack of personnel competence, which led to deficient decision making.
While PTTEP Australasia’s licence to operate was not withdrawn, the company was only able to continue functioning under what it described as “the most comprehensive and rigorous monitoring regime ever seen in the Australian oil and gas industry”. For example, it was required to submit monthly progress reports, conduct quarterly meetings and undergo compliance auditing by Noetic Group every six months for 18 months (a condition due to end this month). A list of additional special conditions was also applied to the company’s permits.
The Montara Commission of Inquiryreport contained 100 findings and made 105 recommendations, including the creation of a single, independent regulatory body for the offshore petroleum industry.
Despite opposition from the WA Government, this recommendation was granted and NOPSEMA was established in January 2012 as Australia’s first single, national regulator for the offshore oil and gas industry in Commonwealth waters.
Previously, offshore operations had been monitored by a designated state or territory authority. The designated authority responsible for the well integrity at Montara was the Northern Territory Department of Resources.
NOPSEMA’s role includes the regulation of occupational health and safety, wells and well operations, the structural integrity of facilities, and environmental management.
The Montara Commission of Inquiry also made some positive findings and commended PTTEP Australasia for: underwriting the oil spill response costs; providing logistics support to the Australian Maritime Safety Authority; the injury-free offshore evacuation of 69 people onboard the rig; responding appropriately by drilling a relief well; and for acting diligently, with vigour and a sense of urgency, in relief well response.
In addition, the company prevented oil from impacting sensitive marine resources  and initiated an environmental monitoring program to address any long-term effects of the Montara oil spill.
To be funded by PTTEP Australasia for a minimum of two years, the program’s research is being conducted by prestigious research institutes including CSIRO, and will create a new world-class body of scientific data on the ecology of the Timor Sea.
PTTEP Australasia admitted that the Montara blowout had significant consequences for PTTEP and PTTEP Australasia: With a tarnished reputation and the delayed production start-up of the Montara field, the company has never faced a more challenging period.
Projects
Montara PTTEP Australasia’s sole existing project at this time, the Montara redevelopment (650km west of Darwin) comprises the Montara, Swift and Skua fields in the Bonaparte Basin. Oil reserves from these fields are estimated to be about 37 million barrels, and first oil has been re-forecast for the third quarter of this year.
The Montara field was not in production at the time of the blowout. The development plan for the Montara field encompasses: an unmanned four-legged wellhead platform; four horizontal production wells; a single gas re-injection well; a floating production, storage and offloading (FPSO) vessel; and a mooring system, flowlines, risers and control umbilicals connecting the platform to the FPSO.
The initial development of the Swift field includes three subsea wells tied back to the
Swift manifold (connected to the wellhead platform via an 18km, 14-inch rigid flowline) via rigid spool flowlines. Similarly, Skua comprises two subsea wells tied back to the Swift field manifold by a 5.5km, 10in rigid flowline.
Cash-Maple PTTEP Australasia is preparing to develop its  Cash-Maple gas fields (also in the Timor Sea, 680km west of Darwin) and is considering conventional LNG and FLNG options. The company reported on its website that full development of the fields would require multi-billion dollar investment, and that it was aiming to confirm the development concept and a final investment decision in late 2014, with first gas to begin in 2019.
In June last year, PTTEP Australasia submitted an Environment Protection and Biodiversity Conservation referral to the Commonwealth Department of Sustainability, Environment, Water, Population and Communities.
Results from an initial appraisal well, Cash-2, drilled in September 2011 indicated a larger gas resource than previously projected.
The company reported well flow rates of 27 million standard cubic feet of natural gas per day and 30mmscf/d, and logs indicated that the well intersected a gross gas column of 301m.
Other key milestones PTTEP Australasia has reached in the initial development of the Cash-Maple project include the completion of a 3D seismic survey in June, and the selection of a preliminary development concept.
A second appraisal well, Maple-2, was drilled to a total depth of 4150m in July, and flowed at about 30mmscf/d with 696 barrels of condensate per day. PTTEP Australasia reported that the outcomes were in line with expectations following the positive results of the Cash-2 appraisal well, and that they provided the company with greater insight into the size of the gas resource at  Cash-Maple.
PTTEP Australasia reported that the fields, along with five others to be included in the Cash-Maple project, were considered to be stranded reserves that could not be developed using traditional production facilities. The company stated that it anticipated that between 11 and 21 production wells would be required across the development, with production estimated at 2 million tonnes per annum of LNG, in addition to condensate and associated hydrocarbons.
PTTEP Australasia has established a partnering agreement with The Linde Group of Germany and Dutch company SBM Offshore for the provision of design, construction and operation services.

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