Australia Faults Thai-Owned Firm Over Record Oil Spill

[webfact]

Australia faults Thai-owned firm over record oil spill

by Madeleine Coorey

SYDNEY, November 24, 2010 (AFP) - Australia said on Wednesday that a Thai-owned oil firm's "widespread and systematic shortcomings" caused the worst offshore drilling accident in the country's history, which created a massive oil slick.

A government report found operator PTTEP Australasia failed to observe "sensible" practice at the Montara field in the pristine Timor Sea off Australia's northern coast, Resources Minister Martin Ferguson told parliament.

A damaged well pumped thousands of barrels of oil into the sea for almost 10 weeks before it was capped, prompting conservatives to warn of an environmental catastrophe for the region's marine and bird life.

"The widespread and systematic shortcomings of PTTEP Australasia's procedures were a direct cause of the loss of well-control," Ferguson said.

"Well-control practices approved by the regulator would have been sufficient to prevent the loss of well-control, however PTTEP Australasia did not adhere to these practices or its own well-construction standards."

The report also criticised the Australian regulator which oversaw the project, saying its "minimalist approach" to its responsibilities gave it little chance of discovering the company's poor practices.

PTTEP Australasia, a unit of Thailand's PTT Exploration and Production PCL, is being pursued for compensation by Indonesia over the Montara slick which environmentalists say grew to almost 90,000 square kilometres (35,000 square miles).

Thousands of barrels of oil gushed into the sea from a damaged well after a blow out on the West Atlas rig on August 21, 2009 -- prompting the evacuation of workers.

Repeated efforts to contain the spill failed before it was finally plugged on November 3, after the rig burst into flames after one failed attempt, by pumping in heavy mud. Noone was injured in the accident.

The leak more than 200 kilometres (124 miles) off the Kimberley coast was the worst Australia has seen from an offshore oil platform, although it was smaller than this year's spill in the Gulf of Mexico.

Environmental groups said the slick threatened bird and marine life off Western Australia's resource-rich north coast and PTTEP Australasia has warned the site may need environmental monitoring for up to seven years.

The report recommended the government review the company's licence to operate the Montara oilfield and said it should show why its rights to operate in Australian territory should not be cancelled.

Also under the spotlight was the Northern Territory Department of Resources which the report said should also be reviewed.

Ferguson said the report would inform Australia's resource industry, which is enjoying strong exports thanks to booming Asian demand, adding that the Montara spill was preventable had either PTTEP or the Australian authority complied with requirements.

The minister said the government would move towards introducing a single, national offshore regulator for petroleum.

Australian Greens Senator Rachel Siewert welcomed the report, saying part of the problem was the culture that had developed around the oil and gas industry.

"The culture of 'she'll be right mate' has to change and we'll be looking for that cultural change with this regulator," she told reporters.

-- (c) Copyright AFP 2010-11-24

[spiderleghead]

mmm, the competency of thai firms is spreading

[kcallagmy]

mmm, the competency of thai firms is spreading

If you knew anything about this you would question the competency of Aussie firms..... PTTEP bought Coogee Resources who owned the Montara project. PTTEP did not develop this well....... They got stuck holding the bag when it failed......

[haveaniceday]

PTT tried to beat the PTT MAP TA PHUT standards, but failed this time.....

Not enough people to murder out in the Timor Sea.

Edit, maybe the above post has some credibility as in a bit of bad luck buying a problem well, but if it was managed Thai Style of putting Safety First signs around everywhere and then cut every corner, then it's hardly bad luck. Lots of speculation I know, but, if they were operating in Australia and breaking the Australian standards and broke the law, well, tito.

The Map Ta Phut situation is simply outrageous, but, TIT, life is cheap.

Amazing Amusing Thailand.

Edited November 24, 2010 by haveaniceday

[kcallagmy]

obviously you did not read the post. PTTEP had nothing to do with it... Or maybe you are just into bashing Thai companies...

[haveaniceday]

Edit: Removed reference that criticised PTT Mat Ta Phut standards ........

Amusing Thailand

[RedNIvar]

obviously you did not read the post. PTTEP had nothing to do with it... Or maybe you are just into bashing Thai companies...

If it is so clearly not PTTEP's issue as you stated, then why is everyone holding them accountable? Their shortcomings and lack of sensible practice is being questioned. A lot of us relate to this with many local Thai companies, not all, most.

You are either Thai, or the luckiest foreigner here, to have lived in Thailand without ever encountering a shady Thai business man.

[kcallagmy]

They are held accountable because they own the well..... Bu they did not build the well.... My point is that if you want to point fingers at poor safety practice, point them at the people that built it!

I am not Thai and have lived many countries. And everywhere there are shady business people. Actually in my experiences in Thailand, the really shady ones that have ripped me off personally are other farangs....

[rogerman]

They are held accountable because they own the well..... Bu they did not build the well.... My point is that if you want to point fingers at poor safety practice, point them at the people that built it!

I am not Thai and have lived many countries. And everywhere there are shady business people. Actually in my experiences in Thailand, the really shady ones that have ripped me off personally are other farangs....

A bit like the American spill...... BP owned it but did not construct it, yet got hammered none the less....it was their responsibility same as pptep's responsibility

[kcallagmy]

difference being BP paid people to build the well for them. They owned the project from day one. PTTEP bought the well after construction completed.....

[stevecm]

difference being BP paid people to build the well for them. They owned the project from day one. PTTEP bought the well after construction completed.....

I think it may have had more todo with the "widespread and systemic shortcomings in the well's operation, which led to the disaster, Mr Ferguson said." and the fact that PTTEP had "adopted a minimalist approach to its responsibilities." Then the construction of the well itself. It seems they basically couldn't operate and correctly maintain the well to a decent standard or follow protocols.

ref: ABC News Article

[Daewoo]

It is PTTEPs responsibility to maintain the safety/control of the well after they bought it...

I buy a car, it has a fault and I don't bother getting it fixed, I have an accident and kill people... is it the fault of the guy on the factory line that installed the faulty component???

I say no... I bought it, my responsibility to ensure it is safe...

[kcallagmy]

i am sure the guys from toyota would buy you drink for your philosophy......

[moetownblues]

I am sure they would have sent a team to conduct a full inspection of the well and found it to be in order before they handed over billions of baht for it. Maybe they bought it on EBAY

[kuffki]

Being an Australian, i could not care less who owns the company or who to blame, i only care about 1 thing, which is who is picking up the bill for the clean up and after damage.

Being Thai owned, i have a feeling its Oz people tax money who are paying for it all.

[kuffki]

Actually in my experiences in Thailand, the really shady ones that have ripped me off personally are other farangs....

You get ripped off by the locals on daily basis, it is just farangs take you for a much bigger amounts :jap:, so you actually notice it

[WarpSpeed]

mmm, the competency of thai firms is spreading

While there is some truth to this statement overall I seem to recall very recently when a British firm had a very catastrophic failure in another part of the world..

[hoaker]

Although PTTEP was not at fault but they would not do anything to fix others fault for the sake of protecting the environmental risks that can happen from it.

[Peephan]

PTTEP is the Operator of Record. It does not matter who they acquired the field/well from, it is their responsiblility to adhere to the published standards and specifications. It is not normal for a 'rider' to be used in such an acquisition to protect the new licensee from the actions of the the entity divesting the asset. If there were questions regarding the viability of the well it is the Operator of Record's responsibility to take whatever actions are needed for a remedy, including the drilling of a replacement well. They are also liable for any and all repercussions, i.e environmental, as a result of operating said well.

I know for a fact that PTTEP cannot operate a chicken farm, much less an oil/gas field. The Australian Government approved them as an Operator in order othe the acquisition to go forward, and needs to fire whoever allowed that to open.

[chalvy]

Fact of the matter is that, upon completion of a successful and flowing well, PTTEP would be the ones reaping the benefits and rewards. Too often in the drilling industry corners are cut or safety standards ignored due to a perceived idea of unnecessary cost. The truth is that the money earned from a producing well far outweighs the costs associated with drilling and completing and money spent is recouped in a very short timeframe. The fact is that PTTEP and the contractors involved did not adhere to the industry accepted "barrier" system whereby 2 or 3 blow-out barriers are to be present whenever opening the well for whatever reason. Whether it is mud, cement, BOP's or packers- almost all blowouts that have occured were a result of a failure to apply them or a mechanical failure of one or more of them. The technology exists for this to never happen and It all comes down to procedure and whoever it was that decided it was ok to skid the package with insufficient barriers in place. Normally that is the Rig OIM's call. Nothing being said about Seadrill......

[BlackJack]

mmmmm

i have to agree that if you own and operate a cash cow that brings black gold to the surface and then on sell it then you need to look after the cow!

Unfortunately this could turn into a tit for tat and damage Thai Australian relationships.

After all the Thais are always right and never at fault. It was someone elses rig and problems that caused the spill.

In fact it was the people that sold them the rig's fault. Or better still it was the Romans fault - what did the Romans ever do for us.

[saakura]

And nobody has said anything about this???

The report also criticised the Australian regulator which oversaw the project, saying its "minimalist approach" to its responsibilities gave it little chance of discovering the company's poor practices.

[slapout]

The blame stops at PTT, this is not Thailand where they can point fingers, and hope for the problem to go away. Makes no difference where the rig and personnel were from, it is PTT's baby and their reentry without a BOP (if true) is the act of a complete idiot.

PTT has already used the Thai strategy of telling Indonesia, to prove our wrong doing and the damage assessment as we (PTT) do not agree with your figures. You want to do business/operate on the world scene you play by new rules, not protected by your Thai elite status position.

Last week PTT announced that next quarter their profit per liter sold in Thailand will be increased. Their explanation/justification for this increase is to improve the appearance of their existing petrol stations. This comes after they increased the transport fee for petrol to the northern provinces by about (35%)in the past 3 months.

There is a vast difference in BP and PTT, in their acceptance of responsibility, clean up wise and monetary wise. PTT probably should never have been granted permission to operate a outhouse on a offshore facility outside the Thai area of influence.

[Thai at Heart]

I heard from some people in PTT a couple of months ago that they knew this was coming.

They mentioned figures of a fine, that when in baht, I had to stop and

think for a while what phan lan, or lan phan, or muang lan, neung meaung lan actually equated to in USD (1bn).

Either way, I will wait to see if their worst fears are true.

[supaprik]

mmmmm

i have to agree that if you own and operate a cash cow that brings black gold to the surface and then on sell it then you need to look after the cow!

Unfortunately this could turn into a tit for tat and damage Thai Australian relationships.

After all the Thais are always right and never at fault. It was someone elses rig and problems that caused the spill.

In fact it was the people that sold them the rig's fault. Or better still it was the Romans fault - what did the Romans ever do for us.

yeah i hope is doesnt damage Thai/Aust "relationships"...Thailand might have to find 150,000 extra sex tourists from somewhere else!

[dinooz]

mmmmm

i have to agree that if you own and operate a cash cow that brings black gold to the surface and then on sell it then you need to look after the cow!

Unfortunately this could turn into a tit for tat and damage Thai Australian relationships.

After all the Thais are always right and never at fault. It was someone elses rig and problems that caused the spill.

In fact it was the people that sold them the rig's fault. Or better still it was the Romans fault - what did the Romans ever do for us.

yeah i hope is doesnt damage Thai/Aust "relationships"...Thailand might have to find 150,000 extra sex tourists from somewhere else!

or an extra 150,000 barrels of oil to keep petrol prices resonable, latest is The Thai company has some explaining to do if they wish to continue thier license agreement,to be fair the Aust govt also layed blame to the Regulatory body in the Northern Territory, both to blame, the issue is clean up,responsibility and the laws put in place that this doesnt happen again.

[asiawatcher]

No matter who is responsible - the greed in cost saving and black gold sees no bounds. Its what we do.

[housepainter]

I looked in amazement at oil and gas refineries in Thailand.

I wondered how they ever managed to construct such without blowing themselves up. Then I realised they bring in those ........ you know, to be rubbished farangs with the know how.

It later blows up when the Thais are left to do the maintenace.

What stuns me is letting Thais have anything to do with 'oz' companies; especially volatile oil and gas.

Ok. In the Uk the Thais have purchased what was Chorus steel, but the Uk runs it to Uk standards.

Thais hands ever holding spanners my side of the North sea I think not.

In summary, get real: Thai Standards - give me one good example.

[VictorOne]

obviously you did not read the post. PTTEP had nothing to do with it... Or maybe you are just into bashing Thai companies...

So the Australian authorities are just going thru a litigation exercise.

And on the subject bashing Thai companies, They leave themselves wide open to being bashed. Perhaps you have been doing the old head in the sand bit

[stevecm]

Oil spill company may lose licences

Tom Arup

November 25, 2010

THE company responsible for one of Australia's worst oil spills could be stripped of its offshore drilling licences if measures to shore up safety standards are not up to scratch.

Resources Minister Martin Ferguson has decided to review Thai-owned gas and oil giant PTTEP's licence to operate in Australia after a damning report into last year's Montara oil disaster, released yesterday, found the company failed ''basic oilfield practice 101'' resulting in a 74-day spill spewing 29,600 barrels of oil into the Timor Sea.

The long-awaited report, which Mr Ferguson first received in June, found a cement barrier in the Montara wellhead failed due to shoddy installation by PTTEP.

A failure of ''judgment and competence'' by PTTEP's rig workers meant problems with the barrier were not recognised. When a second well barrier was removed, leaving the compromised casing as the only protection, the well blew out. ''What happened with the H1 Well was an accident waiting to happen; the company's systems and processes were so deficient and its key personnel so lacking in basic competence, that the blowout can properly be said to have been an event waiting to occur,'' the report finds.

An independent review of the adequacy of PTTEP's promises to reform its Australian operations over 24 projects has now been ordered. Mr Ferguson will use the review, due next month, to decide whether he will serve a ''show cause'' notice to PTTEP that could lead to the cancellation of its petroleum titles.

PTTEP said yesterday that it deeply regretted the Montara incident but believed it was tackling the problems through its reform plans.

The Montara spill is regarded as one of Australia worst oil disasters. For 74 days an estimated 400 barrels a day of oil leaked into the Timor Sea, creating a 90,000-square-kilometre slick. The West Atlas rig later went up in flames then burned for two days.

The leak and fire were eventually stopped on November 3, 2009, when heavy mud was pumped down a relief well. A commission of inquiry, headed by former bureaucrat David Borthwick, was announced by Mr Ferguson two days later.

The inquiry's review also revealed that the Northern Territory Resources Department, which oversaw the Montara oilfield and the PTTEP project, took shortcuts and had a too-cosy relationship with the company.

The department also adopted a ''tick and flick'' approach in its oversight role, missing critical flaws in PTTEP's proposed plans the inquiry says it should have found.

Mr Ferguson said the government would adopt 92 of the commission's 105 recommendations, including establishing a national offshore regulator by 2012 to oversee the offshore drilling industry, and implementing laws to ensure companies pay for environment damage from oil spills.

The report also finds the total environmental effects of the spill will never be known, partly because environmental monitoring took too long to begin. Reports from the federal Environment Department and green groups estimate extensive populations of seabirds and marine life could have been hurt by the slick.

The Australian Conservation Foundation's Chris Smyth said problems highlighted by the Montara review meant a suspension of expanding the offshore drilling industry was needed to establish environmental marine sanctuaries.

Australian Petroleum Production & Exploration Association chief executive Belinda Robinson said the commission's report presented a strong case for a national regulator, which only West Australia is resisting.

http://www.theage.com.au/national/oil-spill-company-may-lose-licences-20101124-187ed.html