Independent oil and gas production company Jadestone Energy has stopped production from its Montara field offshore Australia following an oil spill.
Jadestone said that crude oil was being transferred between two crude oil tanks onboard the Montara Venture FPSO on June 17 and that oil was observed on the surface of the sea adjacent to the FPSO during the transfer.
The company ceased transfer operations immediately and production from the Montara fields were shut in as a precautionary measure.
According to Jadestone, the release of oil to sea was quickly halted by pumping water into the tank, indicating a leak somewhere at the tank base. A subsequent inspection using an ROV confirmed a small 1.2-inch diameter hole in the bottom of the tank.
Having now controlled the release of oil, the next step will be to apply a temporary repair to remove the remaining oil from the tank. Following this, the tank will be accessed and cleaned to complete an inspection and permanent repair. This is the same work plan which has already been applied to all the other main crude oil storage tanks, as part of the five-yearly inspection and repair program which has been underway since Jadestone assumed operatorship of the Montara assets.
The volume of released oil is estimated at 800 to 1,300 gallons, which was monitored and had fully dispersed by the morning of June 19.
Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) was notified of the incident immediately and will initiate an onsite inspection of the Montara facilities on June 21.
Jadestone’s preliminary estimate is that it will take approximately four weeks to complete the tank inspection and effect repairs sufficient to restart production at Montara, with appropriate isolation of the crude oil tank. Thereafter, following consultation with key stakeholders, a full remediation program will be conducted, like the one completed on all the other main crude oil tanks.
The company estimates the cost of securing the leak site and permanent repair of the crude oil tank at $2-3 million. This is consistent with the overall expenditure to date on the tank inspection and repair work, which totals $11 million over the past three years.
If Montara is restarted on time, Jadestone expects that full-year 2022 production to be at the lower end of the previously announced guidance range of 15,500 – 18,500 boe/d.
“Whilst we deeply regret this event, immediate, and decisive action by the Jadestone team limited the quantity of oil released and made the facility safe, and I commend the work of both the offshore crew and the onshore operational staff for their quick response in managing this incident.
“The integrity of our facilities is at the heart of our strategy and this oil tank was due for inspection within the next few weeks as part of our five-yearly maintenance cycle, which would have been the final key step in the significant inspection and repair plan that has been underway on the Montara Venture since we assumed operatorship in 2019.
“It’s particularly frustrating for this event to occur close to the planned inspection and repair activity, but our investment in the facilities to date is bearing fruit, with facility uptime now over 90 percent and with further improvements in the planning stage,” Paul Blakeley, President and CEO of Jadestone, said.
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