A report into Australia's worst offshore oil spill has recommended a Thai-based company show cause why its rights to operate in Australian territory should not be cancelled.
A report into Australia's worst offshore oil spill has recommended a Thai-based company show cause why its rights to operate in Australian territory should not be cancelled.
Resources Minister Martin Ferguson outlined to parliament the key findings of a commission of inquiry into the Montara spill in the Timor Sea in 2009.
The inquiry, headed by David Borthwick, recommended the government issue a show cause notice to PTTEP Australasia for breaching relevant laws.
"The commissioner has recommended that I undertake a review of PTTEP Australasia's licence to operate the Montara oilfield," Mr Ferguson said.
"He has further recommended that ... I issue a show cause notice to PTTEP Australasia pursuant to the cancellation of title sections of the Offshore Petroleum and Offshore Storage Act of 2006."
Mr Ferguson said he would wait for an independent departmental review of PTTEP's action plan before making a decision.
The review started in September and will advise the minister if the company's action plan will ensure the company's procedures meet best practice standards.
PTTEP through its subsidiaries operates seven exploration permits, five production licence, seven retention leases and interests in other permits which it does not operate.
A review of the company's licence to operate only the Montara field would under the circumstances be insufficient, Mr Ferguson said.
"The outcome of this process will assist me in forming a view as to whether the deficiencies in PTTEP Australasia's procedures as identified by the commissioner relate only to the Montara oilfield or PTTEP's general performance as an operator."
The review is due by the end of 2010.
Mr Ferguson said he would make the review's findings public within seven days of receiving the advice.
"The outcome of this independent review will be a central part of my consideration as to whether to issue a show cause notice which might lead to the cancellation of PTTEP's petroleum titles."
PTTEP released a statement late in the day saying the company deeply regretted the spill.
PTTEP spokesman Chris Kalnin acknowledged there were deficiencies in the company's operation.
He said the company is working to address them through an action plan to strengthen the integrity and safety of drilling operations.
Mr Kalnin said all drilling supervisors and management responsible during the Montara incident have been removed from their jobs.
State Mines and Petroleum Minister Norman Moore said the report would provide understanding of how the 2009 oil spill occurred off the Northern Territory coast.
"I will be carefully studying this report and the Federal Government's response as I view this blowout incident as very serious. What we can learn from the report will impact the way environmental and safety regulation is carried out in WA," Mr Moore said.
"WA's standard of regulation is much more rigorous than NT was operating at the time of the incident, however we still have a significant opportunity to learn from the findings of this inquiry in regard to regulating our own jurisdiction."
The Australian Greens have also welcomed the release of the report.
Senator Rachel Siewert said it report appears to have dealt comprehensively with a number of key issues and has made a series of wide ranging recommendations which the Greens will vigorously pursue.
"Given the report's damning findings against PTTEP Australasia it is of great concern that since the spill occurred they have acquired new leases and could continue to operate," Senator Siewert said.
"This clearly highlights the need for the appropriate legislative changes to be put in place so as to suspend the operations of companies when evidence exists calling into question their capacity to operate safely," she said.
The Australian Petroleum Production & Exploration Association welcomed the report and the government's response and said it supported the case for a single regulator.
APPEA Chief Executive Belinda Robinson said the report highlighted disconnects and duplication in the existing regulatory system relating to safety, integrity, environment and reservoir management.
"A compelling case has been made for the establishment of a single integrated offshore regulatory authority to manage these critical operational areas."
Ms Robinson said APPEA would work to ensure any new national body provided robust and professional oversight of the offshore industry and removed duplication between the commonwealth, the states and the Northern Territory.
"The key issue is to ensure that regulatory reform delivers the assurances the community needs that each and every industry proposal is overseen, verified, and thoroughly addressed by the world's most efficient and effective regulatory system."
Ms Robinson said the industry had not been sitting on its hands pending the release of the report.
