Gulf Oil Spill Response in Perspective

AT readers who have been following the Gulf oil spill and its consequences have a new standard of comparison for crisis response, the Honorable Martin Ferguson AM MP, Australia's Minister for Resources and Energy, who was faced with the largest offshore oil spill from a drilling rig (the third-largest after two oil tanker accidents) in Australian history. You are familiar with Interior Secretary Salazar's offshore drilling moratorium. You will find the Australian response quite different.

Causes of the Accidents

The causes of the BP Deepwater Horizon accident in the Gulf of Mexico and the PTTEP AA (PTT Exploration & Production - Australasia Ashmore) Montara Wellhead Platform in the Timor Sea off Australia are amazingly similar. Both were due to failure of the primary cement inside the shoe, not the annular flow theory so beloved by the president's scientific advisors. Here are the key findings of the Australian inquiry:

The source of the Blowout is largely uncontested. While the Inquiry received submissions advancing several theories, it is most likely that hydrocarbons entered the H1 Well through the 9⅝" cemented casing shoe and flowed up the inside of the 9⅝" casing. The Inquiry finds that the primary well control barrier - the 9⅝"   cemented casing shoe - failed.

The preliminary findings of the Oil Spill Commission are remarkably similar in both cases. But the responses by the governments have been quite different. Here are excerpts from Mr. Ferguson's Ministerial Statement.

6. At the time of both these incidents, there were calls from some parts of the community for a moratorium on acreage release and industry activities.

7. Our approach must be to ensure our oil and gas exploration and production operations are the best and safest in the world.

8. Shutting down the industry and putting the nation's energy security, jobs and the economy at risk does nothing towards achieving any of these goals.

9. Offshore petroleum activities have been occurring in Australia for over 40 years with approximately 3000 wells safely drilled during this time. The Montara incident was the first well blowout in Australia in over 25 years.

10.The Australian Government is committed to applying the lessons from the Montara and Gulf of Mexico incidents so as to improve the protection of human health and safety and the protection of marine environments.

11. This is essential if Australia is to continue to have a viable offshore oil and gas industry able to contribute to Australia's and our major trading partners' energy security needs. ...

19.During the Inquiry concerns regarding the state of the five remaining suspended wells in the Montara field were raised. On my instruction, on 9 April 2010, my Department requested the Northern Territory Department of Resources to seek advice from PTTEP AA  on the status and integrity of the other suspended wells and information on what remedial action would be taken if required.

20.PTTEP AA implemented a work program to ensure the integrity of the remaining wells on the Montara Wellhead Platform. AGR (A.g.R Certification ), an international company with the requisite expertise, witnessed the satisfactory barrier testing of the wells at the Montara Wellhead Platform. AGR's verification report has been further assessed by Geoscience Australia and the Northern Territory Department of Resources. Geoscience Australia advises that all possible work to ensure the integrity of the suspended wells at the Montara platform has been undertaken and completed and that the AGR verification report provides appropriate assurance that the barriers are competent.

21.The Commissioner has recommended that I undertake a review of PTTEP AA's licence to operate at the Montara oil field. He has further recommended that, as the mechanism for instigating this review, I issue a ‘show cause' notice to PTTEP AA, pursuant to the cancellation of titles sections of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

22.I have accepted the Commissioner's recommendation to review PTTEP AA's licence to operate.

23.However, PTTEP through its Australian subsidiaries (of which PTTEP AA is one) is the operator of seven exploration permits, five production licences and seven retention leases and has interests in a further five exploration permits where it is not the operator. A show cause notice can only be issued where a breach of the Act has been identified, and then only in relation to the Title relevant to that breach. I believe a review of PTTEP AA's licence to operate which was restricted to its operations in the Montara field would, in these circumstances, be insufficient.

24.After careful consideration, I directed my Department to instigate an independent review of the Action Plan that PTTEP, the parent company of PTTEP AA, submitted to the Commission of Inquiry. This Action Plan was developed to comprehensively address the technical and governance issues identified by the Commissioner and has application across their entire Australian operations. The independent review commenced on 6 September 2010

What a difference having a grown-up in charge makes!
AT readers who have been following the Gulf oil spill and its consequences have a new standard of comparison for crisis response, the Honorable Martin Ferguson AM MP, Australia's Minister for Resources and Energy, who was faced with the largest offshore oil spill from a drilling rig (the third-largest after two oil tanker accidents) in Australian history. You are familiar with Interior Secretary Salazar's offshore drilling moratorium. You will find the Australian response quite different.

Causes of the Accidents

The causes of the BP Deepwater Horizon accident in the Gulf of Mexico and the PTTEP AA (PTT Exploration & Production - Australasia Ashmore) Montara Wellhead Platform in the Timor Sea off Australia are amazingly similar. Both were due to failure of the primary cement inside the shoe, not the annular flow theory so beloved by the president's scientific advisors. Here are the key findings of the Australian inquiry:

The source of the Blowout is largely uncontested. While the Inquiry received submissions advancing several theories, it is most likely that hydrocarbons entered the H1 Well through the 9⅝" cemented casing shoe and flowed up the inside of the 9⅝" casing. The Inquiry finds that the primary well control barrier - the 9⅝"   cemented casing shoe - failed.

The preliminary findings of the Oil Spill Commission are remarkably similar in both cases. But the responses by the governments have been quite different. Here are excerpts from Mr. Ferguson's Ministerial Statement.

6. At the time of both these incidents, there were calls from some parts of the community for a moratorium on acreage release and industry activities.

7. Our approach must be to ensure our oil and gas exploration and production operations are the best and safest in the world.

8. Shutting down the industry and putting the nation's energy security, jobs and the economy at risk does nothing towards achieving any of these goals.

9. Offshore petroleum activities have been occurring in Australia for over 40 years with approximately 3000 wells safely drilled during this time. The Montara incident was the first well blowout in Australia in over 25 years.

10.The Australian Government is committed to applying the lessons from the Montara and Gulf of Mexico incidents so as to improve the protection of human health and safety and the protection of marine environments.

11. This is essential if Australia is to continue to have a viable offshore oil and gas industry able to contribute to Australia's and our major trading partners' energy security needs. ...

19.During the Inquiry concerns regarding the state of the five remaining suspended wells in the Montara field were raised. On my instruction, on 9 April 2010, my Department requested the Northern Territory Department of Resources to seek advice from PTTEP AA  on the status and integrity of the other suspended wells and information on what remedial action would be taken if required.

20.PTTEP AA implemented a work program to ensure the integrity of the remaining wells on the Montara Wellhead Platform. AGR (A.g.R Certification ), an international company with the requisite expertise, witnessed the satisfactory barrier testing of the wells at the Montara Wellhead Platform. AGR's verification report has been further assessed by Geoscience Australia and the Northern Territory Department of Resources. Geoscience Australia advises that all possible work to ensure the integrity of the suspended wells at the Montara platform has been undertaken and completed and that the AGR verification report provides appropriate assurance that the barriers are competent.

21.The Commissioner has recommended that I undertake a review of PTTEP AA's licence to operate at the Montara oil field. He has further recommended that, as the mechanism for instigating this review, I issue a ‘show cause' notice to PTTEP AA, pursuant to the cancellation of titles sections of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

22.I have accepted the Commissioner's recommendation to review PTTEP AA's licence to operate.

23.However, PTTEP through its Australian subsidiaries (of which PTTEP AA is one) is the operator of seven exploration permits, five production licences and seven retention leases and has interests in a further five exploration permits where it is not the operator. A show cause notice can only be issued where a breach of the Act has been identified, and then only in relation to the Title relevant to that breach. I believe a review of PTTEP AA's licence to operate which was restricted to its operations in the Montara field would, in these circumstances, be insufficient.

24.After careful consideration, I directed my Department to instigate an independent review of the Action Plan that PTTEP, the parent company of PTTEP AA, submitted to the Commission of Inquiry. This Action Plan was developed to comprehensively address the technical and governance issues identified by the Commissioner and has application across their entire Australian operations. The independent review commenced on 6 September 2010

What a difference having a grown-up in charge makes!