The federal authorities has signed a $325 million contract to begin eradicating an ageing oil vessel floating in the Timor Sea however, with offshore trade to bear the value, a senator fears the job won’t be as thorough appropriately.
- The federal authorities has contracted the first phase of decommissioning for an enormous oil vessel in the Timor Sea
- It follows the implementation of a levy upon the offshore oil and fuel trade that was backdated to July 1, 2021
- A federal senator has raised issues about the scope of the decommissioning contract
The Northern Endeavour is a 274-metre former oil manufacturing vessel linked to the Laminaria and Corallina oilfields about 550 kilometres north-west of Darwin.
It grew to become the duty of the federal authorities in February 2020 when its former homeowners, Northern Oil and Gas Australia (NOGA), went into liquidation.
It meant taxpayers have been initially going to foot the bill for the decommissioning of the ageing, rust-riddled vessel, which, together with its undersea oil wells and infrastructure, was estimated to value up to $1 billion.
But laws handed final week will pressure the value onto the offshore oil and fuel trade, with a 48-cent per barrel levy imposed on all offshore operators, backdated to July 1, 2021.
“Decommissioning the Northern Endeavour is a unique and unprecedented duty for the Commonwealth,” Federal Minister for Resources Keith Pitt mentioned.
UK-based firm Petrofac has been contracted to disconnect the Northern Endeavour from its subsea tools, briefly droop the wells, and prepared the vessel to be towed to shore.
Another separate contract is predicted to cope with the everlasting plugging of the wells and elimination of the remaining subsea infrastructure.
The federal authorities beforehand contracted Upstream Production Solutions to preserve the vessel in “lighthouse mode”, which has value $251 million.
The levy is predicted to cowl the upkeep prices.
Questions over scope
Independent South Australian senator Rex Patrick has been following the subject of the Northern Endeavour carefully and mentioned the signing of a contract for the decommissioning was a constructive step.
“Unfortunately, we do not know the full scope of the contract work, or how the sea ground shall be left in the finish,” he mentioned.
“There are many alternative methods which you can disconnect the vessel.
He feared the new levy meant the offshore oil and fuel trade would put “a bunch of strain on authorities to do the minimal work that’s required, moderately than the correct job of bringing it again to its pristine state”.
Petrofac mentioned the disconnection of the Northern Endeavour was “anticipated to happen over roughly 18 months”.
“All actions shall be executed in shut session with the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to make positive strict security and environmental protections are in place,” an announcement on Petrofac’s website mentioned.
Creditor continues legal motion
Meanwhile, Castleton Commodities, a creditor to NOGA, is suing the federal authorities in the New South Wales Supreme Court.
It needs to take management of the vessel, so it will possibly promote it and recoup the money they’re owed by NOGA, believing it ought to have taken management when the Northern Endeavour’s earlier homeowners went into liquidation.
According to federal finances papers detailing dangers to the authorities’s fiscal place, Castleton is “looking for orders for the delivery of the [Northern Endeavour], the appointment of a receiver to realise the worth of the property and a declaration that it’s entitled to a first cost over the proceeds”.
Senator Patrick mentioned he understood the authorities was “shifting in direction of a settlement” of the case.
“But I do not know whether or not or not it’s going to come via to the finish without the taxpayer having to bear some value,” he mentioned.