PTTEP Australasia (PTTEP AA) has accepted fines totalling $510,000AUD handed down today by the Darwin Magistrates’ Court for its responsibility in the 2009 Montara incident.
Yesterday, the company pleaded guilty to a total of four charges, laid by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), but the magistrate reserved his decision on the penalties for each of the charges until today.
PTTEP AA Chief Executive Officer Ken Fitzpatrick said the company has taken a cooperative approach in pleading guilty to all charges to accept accountability for the mistakes which were made.
“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.”
ENDS
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Editor’s note:
PTTEP AA deeply regrets the Montara incident. Mistakes were made that should never be repeated.
The company has invested substantially in the clean-up, recovery and long-term environmental monitoring program since the Montara incident.
PTTEP AA’s approach has been to work with the Department of Resources, Energy and Tourism (DRET); Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC); and other stakeholders.
Since the incident, the emphasis has been to transform the company’s operations and culture, sharing the learnings with the Australian oil and gas industry to minimise the chance of a similar incident happening again.
Details of the charges and penalties
Charges were laid against PTTEP AA in August 2012 by the Department of Public Prosecutions (DPP) in the Darwin Magistrates’ Court to achieve legal conclusion regarding matters related to the 2009 Montara incident.
The company faced a total of four charges, with three falling under Clause 9(4) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
The magistrate applied a single penalty for the three charges, as they are associated with the same statutory provision. This penalty amounted to $495,000AUD
A fourth charge was laid under Section 569(1) relating to failure to ensure that operations were conducted ‘in a proper and workmanlike manner and in accordance with good oilfield practice’. This charge carried a penalty of $15,000AUD
PTTEP AA pleaded guilty to all four charges on Thursday 30th August. The magistrate, however, reserved his decision on the imposition of penalties until Friday 31st August.
For reference, please find a link below to the statement issued to media by PTTEP AA Chief Executive following the guilty plea on 30th August:
Link: PTTEP AA Accepts Court Findings
Borthwick Commission of Inquiry
The Australian Government initiated the Borthwick Commission of Inquiry to determine the causes of Montara and what should be done to prevent another such incident. The inquiry had the powers of a Royal Commission.
- November 2010: Terms of reference announced
- 15 March – 16 April 2010: Public hearings held in Canberra
- 24 November 2010: Report published, containing 100 findings and 105 recommendations, most of which were adopted by the Australian Government
The Commission of Inquiry found the root causes of the blow out were:
- Failure to maintain two well barriers
- Failure to verify barriers
- Poor management of change control
- Lack of personnel competence, which led to deficient decision making
The Commission of Inquiry final report made some positive findings that commended PTTEP AA for:
- Underwriting oil spill response costs and providing logistics support to Australian Maritime Safety Authority (AMSA)
- Injury-free offshore evacuation of all 69 personnel onboard the drilling rig
- Acting appropriately in undertaking to drill a relief well
- Highest consideration for human safety when reviewing well control options
- Acting diligently, with vigour and a sense of urgency in relief well response
- Largely achieving the objective of preventing oil from impacting sensitive marine resources
- Initiating and funding the long term Environmental Monitoring Program
Montara Action Plan
PTTEP AA, with strong support from its Bangkok-based parent company PTTEP, began developing the ‘Montara Action Plan’ (MAP) immediately after the well was brought under control in November 2009 to address the issues arising from the spill incident. The Action Plan has 59 individual actions under nine main themes.
MAP focuses on short, medium and long term actions to embed the lessons and sustain the learnings from the incident. It addresses the root causes of the incident in four key areas:
- Governance
- Including the formation of an Independent Advisory Committee to advise the CEO on SSHE, performance and operational issues
- Organisation and capability
- Technical systems
- Safety, security, health and environment, culture and management
Line of Sight tool
As part of the Montara Action Plan, the company has implemented a unique ‘Line of Sight’ (LOS) process to monitor the status of critical barriers to prevent Major Accident Events.
The LOS tool provides management with visibility on integrity issues and the ability to intervene quickly. This is ‘live’ through the company’s intranet.
Running LOS checks on the Montara H1 well in March or August 2009 would have identified that critical barriers and verification checks were not in place.
Montara Environmental Monitoring Program
The independent environmental monitoring program started immediately after the incident in November 2009 and continues today. It is one of the most extensive of its type ever undertaken in Australia and includes a series of independent scientific studies by leading marine research institutions.
The program has been developed by PTTEP AA in close consultation with the office of the Federal Minister for the Environment and the Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC).
The program is creating a new world class body of quality data on the marine life and eco-systems of the Timor Sea. The link below takes you to a booklet setting out more detail on the programme:
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Key findings of independent research:
- No oil reached the Australian mainland or Indonesian coast
- An independent shoreline survey by the Western Australian Government affirmed that no oil reached the Australian coast
- Trajectory modeling and real time observations confirmed the main area impacted from the spill was within a 23km radius of the well head
- 62 per cent of the total surface area affected was only impacted for two hours or less
- 98.6 per cent of occurrences of surface hydrocarbons were within Australian waters
The fact sheets available via these links give more information on the causes of and response to the incident, and also on the claim made against the company by the Government of Indonesia:
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Montara incident 2009
The Montara incident occurred on 21 August 2009 when a sudden discharge of gas entered the wellbore of the H1 well and rose to the surface via the Montara well head platform (WHP). This is referred to in the oil and gas industry as a ‘well-kick’.
A short time later an uncontrolled flow of oil condensate, gas and water began venting to the surface under pressure. The gas cloud enveloped the jack up drilling rig West Atlas which was working on site and had been positioned next to and partly above the WHP. Light crude oil flowed into the sea below at an estimated average rate of 400 barrels per day.
All 69 personnel onboard the West Atlas rig were evacuated safely.
The incident resulted in an uncontrolled flow of hydrocarbons into the Timor Sea that lasted for 74 days. The well was killed on 3 November 2009.
Montara is located 250km NW from Australia’s Kimberley coastline and over 300km from the nearest Indonesian landfall.
PTTEP AA agreed to cover all response and clean-up costs on the first day of the incident.
A coordinated incident response operation was launched by AMSA – the designated ‘combat agency’ under the Australian government’s National Spill Plan, on 21 August 2009.
Within the first 48 hours of the incident starting, AMSA had deployed a Hercules aircraft to begin aerial spraying of dispersants.
In this period, well control experts were mobilised from Singapore, a relief well plan was developed and a suitable jack up rig sourced and contracted to drill the relief well to stop the flow.
Comparison of spill incidents
While no oil spill can ever be classed as a benign event, completed studies to-date suggest that the scale and damage caused by the Montara spill ranks low in comparison to other oil and gas incidents in Australia and internationally.
The following table includes the largest spills recorded in Australia; the Petrel-1 gas well blow out in 1969; the spill from the Greek tanker Kirki, off Western Australia in 1991; and the loss of oil from the tanker, Princess Anne Marie in 1975. The estimated amount of oil lost during each of these three incidents was significantly higher than Montara.
| Major Spills | ||
| Incident | Location | Estimated oil amount |
| Macondo – 2010 | Gulf of Mexico, USA | 492,000 tonnes |
| Ixtoc 1 – 1980 | Gulf of Mexico, USA | 454,000 tonnes |
| Gulf War – 1991 | Persian Gulf, Kuwait | 270,000 tonnes |
| Exxon Valdez – 1989 | NW Pacific, Alaska, USA | 36,000 tonnes |
| Kirki vessel – 1991 | Indian Ocean, WA | 17,280 tonnes |
| Princess Anne Marie vessel – 1975 | Indian Ocean, WA | 14,800 tonnes |
| Montara well head platform – 2009 | Timor Sea, Australia | 4,750 tonnes |
| Petrel 1 gas well – 1969 | Timor Sea, Australia | N/A |
Ends