Montara oil spill report finally released

On 24 November 2010, the Australian Government finally released the investigation report into the 2009 Montara oil spill in the Timor Sea that has similarities to the oil rig explosion of BP in the Gulf of Mexico in 2010.

The Energy & Resources Minister, Martin Ferguson, has sat on the report since the Board of Inquiry presented its findings in June 2010 even though there could have been industry-wide safety and design lessons.  Significantly, the report was released after the recent Federal election  and, according to the Minister’s media release, has found :

“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.”

For those readers in America and the Gulf of Mexico, these words may echo what they have heard only a few months ago.

The Government response supports the Report’s finding states:

“…that PTTEP AA’s widespread and systemic procedural shortcomings were a direct cause of the Montara incident.  In addition, the Report identified concerns relating to the integrity of the remaining wells (H2, H3, H4 and GI) at the Montara Wellhead Platform.  The Commissioner concluded that PTTEP AA did not achieve proper control of any of the five wells at the Montara oil field, and that PTTEP AA’s internal systems were insufficient to achieve a high quality of assurance in respect of well operations.” [link added]

How significant the government’s admissions of failure would have been in the August 2010 election will never be known.

It is also significant that although Ferguson can claim the credit for establishing the Board of Inquiry in November 2009, the “failures” he mentions above occurred or continued under his, admittedly brief, term as the Minster for Resources and Energy.

But what of the final report that “contains 100 findings and 105 recommendations, which have implications for governments, regulators, and the offshore petroleum industry.”  According to the Minister’s media release the government is accepting the vast majority (90) of the findings but it must be pointed out that some of these are agreed “in principle” or “in part”.  The government response is a “draft” response which allows for greater maneuvering but may also delay much needed responses, such as the establishment of a single regulator for this industry sector.

It could be argued that the political position of the Federal Government with Independents and Greens holding the balance of power, that all reports in this government will need to be draft to allow for negotiations.

The Government has rejected three recommendations.  One concerned the risk levels of horizontal drilling.  The Government said that:

“The Montara incident was caused by operator complacency and a lack of adherence to standard operating procedures, not the extension of casing in the horizontal well section.”

Another concerned the resolution of disputes and having the regulator involved:

“If a dispute arises between a licensee and a rig operator in relation to a well control issue, and is not resolved between them, the matter must be raised with the relevant regulator before discretionary operations proceed.”

The government rejected this recommendation partly because of the time this would involve but it is suspected that the following reason is the more influential:

“Such action would also in effect transfer the risk to the Regulator rather than the operator who is best placed to assess and understand the risks.”

Governments are loath to “approve” anything in relation to safety and risk even though this remains an expectation of the citizenry.

The Board of Inquiry recommended

“Wellbore gas bubbling should be regarded as a trigger for independent review of well integrity.Industry and regulators should identify and document other triggers.”
But the government rejected this on safety grounds:
“As immediate well control action is required in  the case of ‘gas bubbling’, the Government believes undertaking an independent review of well integrity would compromise safety by delaying an appropriate response.”

The Australian Greens, major agitators for reform in the off-shore oil exploration sector, have responded to the report’s release, saying:

“Senator Rachel Siewert, Greens Marine spokesperson says the report appears to have dealt comprehensively with a number of key issues and has made a series of wide ranging recommendations which the Greens will vigorously pursue. [link added]

“Given the report’s damning findings against PTTEP Australasia it is of great concern that since the spill occurred they have acquired new leases and could continue to operate,” Senator Siewert said today.

“This clearly highlights the need for the appropriate legislative changes to be put in place so as to suspend the operations of companies when evidence exists calling into question their capacity to operate safely.

“The findings against the Northern Territory Government demonstrate a systemic failure to regulate the industry…..”

So there is the potential for a considerable restructuring of off-shore drilling safety regulation and environmental oversight but what does this mean for the rest of Australia’s OHS?  Not a lot.  Within weeks, draft safety codes and regulations will be released for public comment as part of the OHS harmonisation process.  It will be important for to consider how the Montara reforms will fit with this agenda.

Also, Montara’s oil spill and collapse occurred far away from the OHS lobbyist and OHS law reform centres of the east coast capitals.  It will require loud voices in the west to achieve change in the OHS legislative reforms that have originated in the east.

SafetryAtWorkBlog has been advised that the WA Minister for Mines & Petroleum, Norman Moore, will be releasing a statement about the report and the Federal Government’s response in the next few hours.

Kevin Jones

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