Woodside’s “right maintenance at the right time” strategy leads to rusting infrastructure and regulator attention

The national offshore oil and gas regulator, NOPSEMA, has a new direction to Woodside following reporting of two “dangerous occurrences” at the North Rankin Alpha (NRA) platform.

NOPSEMA is currently investigating structural integrity failure of one or more of the 24-tonne caissons that hang under the North Rankin A offshore platform that could fall onto subsea gas and condensate pipelines below. NOPSEMA’s direction states that while the likelihood of pipeline rupture is low, should it occur, loss of hydrocarbon (gas and condensate) from these pipelines may result in a major accident event, and could fall onto gas and condensate pipelines below.

The direction was published a week after Woodside chief executive Meg O'Neill targeted a 30 per cent cut in operating costs, with a focus on cuts on maintenance.

Jess Lerch, National Corporate Campaigner for the Wilderness Society said, “What on earth is going on? Woodside cutting maintenance budgets whilst being regularly investigated by the regulator for egregious maintenance failures on offshore oil and gas infrastructure is horrifying.

“It’s either that Woodside is unable to be trusted to operate in our oceans safely, or that they simply can’t afford to do basic maintenance or decommission their ageing infrastructure on time. Either way, the industry has a big problem here.

“Failures in maintenance are putting workers in real danger and risking oil and gas spills in our precious marine environments. Woodside calling their new strategy ‘Doing the right maintenance at the right time’ is spin that is exposed as soon as it is proffered.

“These maintenance failures also lead to real problems with decommissioning. Woodside’s rusty old Northern Endeavour is now on the Australian public taxpayers’ books to clean up. Woodside’s failure to look after its Nganhurra infrastructure meant it ultimately had to be dumped at sea. It’s not good enough.

“Worse, the industry having the gall to cut maintenance budgets while simultaneously moaning about the only reasonable plan to ensure taxpayers don’t have to foot the bill for the decommissioning debacle of the Northern Endeavour—an industry levy—is intellectually and morally bankrupt.

“Offshore decommissioning is clearly a series of ticking time bombs, but this sort of dismissal of core responsibilities to properly maintain infrastructure virtually ensures these bombs go off,” concluded Ms Lerch.

This latest direction from the regulator follows a series of directions NOPSEMA issued against the company earlier this year in relation to its Nganhurra operations, where substandard maintenance of a riser turret mooring and failure to properly decommission had created a safety risk. The failure to undertake maintenance ultimately meant that Woodside could no longer fulfil its obligations to remove all infrastructure to shore during the decommissioning and had to be dumped at sea (instead of being removed to shore and recycled as previously promised). NOPSEMA is investigating whether legal breaches have occurred in relation to this incident.

This year’s Federal Budget included a levy on the oil and gas industry to ensure that the Australian taxpayer does not need to foot the now unknown decommissioning bill to clean up after the Northern Endeavour. The owner of the Northern Endeavour, Northern Oil and Gas, went into liquidation in February 2020, after being shut down the previous year by the offshore oil and gas regulator after it found corrosion issues that could lead to a major accident event causing multiple fatalities and environmental damage. The facility was previously owned by Woodside, which sold the Northern Endeavour to Northern Oil and Gas as a late-in-life asset just three years prior to the shut down.

The Australian offshore oil and gas regulator recently issued Esso Australia (subsidiary of ExxonMobil) with a General Direction Notice to decommission a huge suite of its elderly, non-producing facilities and wells in Bass Strait. This is Australia’s oldest and longest-running field with assets dating back to 1969. Many of the affected facilities, wells and platforms have already ceased production.

Last month the International Energy Agency (IEA) released its Net Zero by 2050 Report that clearly stated that oil and gas exploration beyond 2021 is inconsistent with its roadmap to Net Zero emissions by 2050 and the Paris Climate Agreement.

For more information contact Jess Lerch on 0423 057 828