PTTEP Australasia (PTTEP AA) has pleaded guilty to four charges in the Darwin Magistrates’ Court for its responsibility in the 2009 Montara incident.
Charges were laid against PTTEP AA in August 2012 by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in the Darwin Magistrates’ Court to conclude all legal matters related to the 2009 Montara incident. The company faced a total of four charges, all of which it pleaded guilty to.
PTTEP AA Chief Executive Officer Ken Fitzpatrick today said the company accepts the decision in its entirety and is looking forward to building on the initiatives it has undertaken since the Montara incident to become a trusted operator in the Australian oil and gas industry.
“Today’s court decision achieves legal resolution of the incident. We deeply regret the incident occurring. We take this penalty and the broader public and industry scrutiny arising from Montara very seriously,” Mr Fitzpatrick said.
“PTTEP AA volunteered to the Australian Government within the first few days of the incident to pay for all response and clean-up costs.
“The company also funds a long-term environmental monitoring program under a separate agreement with the Australian Government.
“Today’s court hearing is a pivotal moment for our company, drawing a line under Montara and allowing us to focus on producing safe and clean operations now and into the future.”
Since Montara, PTTEP AA has significantly transformed its operations and culture. It has introduced a new reporting system that sees all business functions, including Safety, Security, Health and Environment, report directly to the CEO. In addition, the company has developed a unique Line of Sight process to provide transparency on the status of the Major Accident Event (MAE) barriers on the rig providing the capability to spot issues and address them quickly.
“Our aspiration is to be a trusted, open and respected operator in the Australian oil and gas industry. In the time since the incident – almost three years to the day – we have made comprehensive changes, that are recognised by the Australian Government, towards achieving that goal,” Mr Fitzpatrick said.
Media contacts
- Chris Rickard 0415 827 369
- Errol Considine 0419 912 832
- Gavin Ryan 0417 378 625
Editor’s note:
PTTEP AA 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.
Here is a link to an information booklet on the Environmental Monitoring programme undertaken by third parties and funded by the company:
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Since the incident, the emphasis has been to transform our 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
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.
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’.
PTTEP AA pleaded guilty to all four charges.
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:
- 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.
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.
The fact sheets available via this link give more information on the causes of and response to the incident:
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