Oil spilled last week at Jadestone's Montara field offshore Australia, during crude oil transfer between two crude oil tanks onboard the Montara Venture FPSO, forcing the company to shut down production from the offshore fied.
"During the transfer, oil was observed on the surface of the sea adjacent to the FPSO. Transfer operations were ceased immediately and production from the Montara fields was shut in as a precautionary measure," Jadestone said. The incident happened on June 17.
"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 30mm 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 in order to remove the remaining oil from the tank," Jadestone said.
"Following this, the tank will be accessed and cleaned in order 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 programme which has been underway since Jadestone assumed operatorship of the Montara assets, and which is a normal and accepted process approved by regulators and Class inspectors globally," Jadestone added.
"The volume of released oil is estimated at three to five cubic meters, which was monitored and had fully dispersed by the morning of 19 June 2022," the company added.
Jadestone said it expected around four weeks to complete the tank inspection and effect repairs sufficient to resume production at Montara, with appropriate isolation of the crude oil tank.
After that, a full remediation programme will be conducted, similar to that which has been completed on all the other main crude oil tanks.
Jadestone estimates the cost of securing the leak site and permanent repair of the crude oil tank at US$2-3 million. T
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 added.
Paul Blakeley, President and CEO said:“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."
He said Jadestone would work with the Class inspector, NOPSEMA and other stakeholders to develop and execute a plan to safely and permanently repair the hole in the crude oil tank.
"There are many precedents for this type of activity, both within the Asia-Pacific region and globally, and we will deploy the necessary expertise to provide confidence in the solution we implement. It’s particularly frustrating for this event to occur so 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% and with further improvements in the planning stage," he said.