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Oil spill offshore Western Australia at Jadestone’s Montara field, share price dives

© Bloombergcalifornia oil spill
An oil patch floats in the waters of Talbert Marsh during an oil spill in Huntington Beach, California, U.S., on Sunday, Oct. 3, 2021. Jadestone Energy has experienced an oil spill offshore Australia.

UK-listed Jadestone Energy has reported an oil spill offshore Western Australia at the Montara oilfield when oil was being transferred between two crude tanks onboard the Montara Venture FPSO. Oil was observed on the surface of the sea and the field has now been shut down after a hole was identified in the bottom of the tank of the floating production storage and offloading (FPSO) unit.

Some three to five cubic metres of oil was estimated to have been released following the incident on 17 June, Jadestone, which operates Montara, said today.

“Having now controlled the release of oil, the next step will be to apply a temporary repair in order to remove the remaining oil from the tank. Following this, the tank will be accessed and cleaned in order to complete an inspection and permanent repair,” added the company.

Jadestone’s preliminary estimate is that it will take around four weeks to complete the tank inspection and effect repairs sufficient to re-commence production at Montara, with appropriate isolation of the crude oil tank. Thereafter, following consultation with key stakeholders, a full remediation programme will be conducted, similar to that which has been completed on all the other main crude oil tanks. At this early stage, Jadestone estimates the cost of securing the leak site and permanent repair of the crude oil tank at US$2 million to 3 million.

On the basis that full production from the Montara fields can be restarted as estimated, Jadestone expects that full-year 2022 production would be around the lower end of the previously announced guidance range of 15,500 – 18,500 boe/d.

The company’s share price tumbled 15% to 83p at the close of trading in London on Monday.

Australia rules against Thailand’s PTTEP over oil spill

The Montara field is well known for a catastrophic oil spill under PTT Exploration & Production’s operatorship. The oil spill started on August 21, 2009, following an explosion and uncontrollable oil spill in the Timor Sea, off the northern coast of Western Australia, that lasted 74 days, until a relief well was drilled that stopped the leak. PTTEP operated the Montara field in Australian waters at the time of the accident, which occurred 250 kms southeast of Indonesia’s Rote Island.

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