Bud's Offshore Energy (BOE)

Anthea Pitt, Executive Editor of the Petroleum Economist and a native Australian, recently wrote about her country and its historical dependence on natural resources:

Australia is well aware it relies on primary industries for its wealth. In the 19th century, the country proudly “rode on the sheep’s back”. More recently, iron ore, coal, bauxite and gold helped keep the worst of the sub-prime crisis at bay. Soon, a slew of large hydrocarbon developments off the country’s remote northwest coast will come on line, another rich seam flowing into Australia’s resources revenue stream.

The blowout at Montara was well-earned, and Australian and PTTEP were lucky even during a massive disaster. No one was injured, the well was at a remote location, and international attention was soon diverted to the spectacle of Macondo.

Evidence given to the inquiry showed exactly how fortunate Australia had been. It emerged that wells drilled at Montara failed to meet PTTEP AA’s internal well-construction standards, let alone satisfy regulatory requirements. The H-1 well, which had been suspended as a future producer during batch drilling operations, was open to surface for around a week before it blew out. Its downhole cementing job was flawed; there were no mechanical barriers in place. The rig’s blowout preventer was over another well at the time of the incident.

Although PTTEP has been given a pass by Australian Resources Minister Ferguson, the lessons of Montara must not be ignored. Deepwater drilling is not the problem; Montara was in 80m of water. Poor planning and execution are the problem, whether the well is in the Timor Sea, the Gulf of Mexico, the arctic, the North Sea or anywhere else in the world.

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