Australia: Petroleum Operator Successfully Prosecuted Over Montara Platform Blowout
Last Updated: 17 September 2012
Article by Jan Burgess and Thomas Herd

Thailand based petroleum operator PTTEP Australasia has been fined $510,000 (Australian dollars) in relation to the Montara wellhead platform blowout on 21 August 2009. The blowout, which occurred in the Timor Sea off the northern cost of Western Australia, resulted in an oil spill spanning 90,000 square kilometres and lasting 74 days. PTTEP Australasia pled guilty to the charges against it in the Northern Territory Magistrate's Court in Darwin, which consisted of three occupational health and safety violations and one non-occupational health and safety charge. Whilst there were no fatalities or casualties resulting from the incident, the risk of such an occurrence arising as a result of inadequate safety procedures is targeted by Australian health and safety laws.

The successful prosecution is the first for Australian petroleum regulator, NOPSEMA, under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The occupational health and safety offences charged under this Act consisted of failures by PTTEP Australasia to verify barriers in the well. This increased the risk of hydrocarbon release, resulting in the wellhead platform being unsafe for those at or near the facility. The non-occupational health and safety offence resulted from a failure by PTTEP Australasia to carry out operations in a proper and workman-like manner and in accordance with good oilfield practice.

According to a statement from NOPSEMA the regulator is considering options for appeal against the levels of the fines, which are deemed to be relatively low. The company had faced maximum fine levels of $1.7 million (Australian dollars).  NOPSEMA CEO, Jane Cutler, said "Our priority is to ensure that operators are effectively managing risks to the health and safety of workers on offshore petroleum facilities to a level that is as low as reasonably practicable. NOPSEMA is prepared to dedicate significant time and effort to prosecute petroleum facility operators who have breached the OPGGSA and associated regulations."

The chief executive of PTTEP Australasia, Ken Fitzpatrick, said the company had always accepted responsibility and had taken steps to improve their operations to ensure that their mistakes would never be repeated. Following the incident, development drilling at the site has since continued and it is anticipated that production will commence in December 2012.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 17/09/2012.

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