INQ177

All communications between on‐rig and onshore personnel relating to well control should be documented in a timely manner.

The definition of ‘good oilfield practice’ in the OPGGS Act is unduly narrow. The current definition is incapable of application except where things ‘are generally accepted as good and safe’. The definition should be amended such that ‘good oilfield practice includes…’.

Written (rather than verbal) approval from the DA (or new regulator) should be obtained before the commencement of well activities that lead to a physical change of a wellbore, other than in a true emergency situation (requiring amendment to regulation 17 of the Management of Well Operations Regu

The OPGGS Act should be amended to allow for a power to suspend a petroleum production licence (in addition to the current power to cancel a licence or suspend its conditions).

There should be a review to determine whether it is appropriate to introduce a rigorous civil penalty regime and/or substantially increase some or all of the penalties that can be imposed for breaches of legislative requirements relating to well integrity and safety.

NOPSA’s prohibition powers should be extended such that a prohibition notice can be issued where a NOPSA Occupational Health and Safety Inspector believes, on reasonable grounds, that an activity is occurring or may occur at a facility involving an immediate threat to the health or safety of a pe

A single, independent regulatory body should be created, looking after safety as a primary objective, well integrity and environmental approvals. Industry policy and resource development and promotion activities should reside in government departments and not with the regulatory agency.

The proposal of the Productivity Commission’s Research Report (Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector, April 2009) to establish a NOPR should be pursued at a minimum.

Responsibility for well integrity should be moved to NOPSA (as also proposed by the Productivity Commission).

In the meantime, the Minister should:

The recommendations of the Inquiry in relation to suitable ways of achieving well integrity contained in Chapter 3 be included in a guidance manual that is issued for the assistance of industry and regulators.

In the future, and in the interests of ensuring that all possible well control options are comprehensively pursued to exhaustion, decisions as to well control response options should be the result of collaboration between the regulator and the operator rather than leaving one party to make unilat

To better ensure that ‘risks’ are identified and managed in accordance with sound engineering principles and good oilfield practice, it is recommended that regulation 25(1)(a)(i) and (2)(a)(i) of the Management of Well Operations Regulations, be reworded as follows: ‘A titleholder must not commen

The Inquiry supports the objective (rather than prescriptive) approach to regulation now followed in Australia. However, the pendulum has swung too far away from prescriptive standards. In some areas relating to well integrity there needs to be minimum standards.

Logistics management of well control equipment should be conducted in such a way as to operate as a check against deficient well control practices, for example, use of serial numbers to track availability, testing, and deployment of well control equipment.

Decision‐making about well control issues should be professionalised. Industry participants must recognise that decision‐makers owe independent duties to the public, not just their employer or principal, in relation to well control.

Existing well control training programs should be reviewed by the industry, regulators and training providers, with a focus on well control accidents that have occurred (in Australia and overseas).

A specific focus on well control training should be mandatory for key personnel involved in well control operations (including both on‐rig personnel and onshore personnel in supervisory capacities).

Licensees and rig operators (and third party contractors involved in well control operations) should specifically assess, and document, the nature and extent of knowledge/skills of relevant personnel in relation to well control (including familiarity of personnel with agency‐specific requirements

Licensees, rig operators, and relevant third party contractors should develop well control competency standards for their key personnel. Wherever possible, the competencies of key personnel should be benchmarked against their roles and responsibilities.

Licensees, rig operators and relevant third party contractors should develop well control competency standards for key personnel in other entities involved in well control operations.

Achievement and maintenance of well control should be written into the job responsibilities of key personnel, at every level up to and including CEOs. That is, a functional line of accountability for well control must exist up to, and including, CEOs.

Achievement and maintenance of well control should be written into the job responsibilities of key personnel, at every level up to and including CEOs. That is, a functional line of accountability for well control must exist up to, and including, CEOs.

Supervision/oversight of well control operations (within licensees, rig operators and by regulators) must occur without assuming adherence to good oilfield practice.

Licensees and rig operators should be astute in ensuring that corporate systems and culture encourage rather than discourage raising of well control issues. For instance, do performance bonuses or rewards actually encourage or discourage reporting of issues?

The regulator, rather than the responsible Minister, should be given the power to direct an operator to use a particular rig for the purpose of well control operations, if appropriate in the circumstances, and the power should be used in the future if that rig is the best option available.

The regulatory regime should also impose an obligation on an operator to ascertain the availability, and provide details to the regulator, of any potential relief well rigs, prior to the commencement of drilling operations (including prior to each phase of a drilling operation where applicable).<

NOPSA develop a policy of engagement with operators so as to enable experts (including safety experts) to canvas all available options for well control in the event of a blowout.

The regulatory framework should provide that in respect of all activities in Commonwealth waters:

The obligation of companies involved in an incident to meet the full costs of monitoring and remediation should be made a condition of approval of proposals under the EPBC Act and OPGGS Act.

Environment plans and OSCPs should be made publicly available as a condition of approval of proposals under the OPGGS Act, and should clearly set out Scientific Monitoring requirements in the event of an oil spill.

The Government should examine the scope for a single environment plan to meet the regulatory requirements of both the OPGGS Act and the EPBC Act. This could possibly be achieved by way of bilateral agreements and accreditation arrangements and/or legislative amendment.

OSCPs should be endorsed by AMSA prior to regulatory approval to ensure that they align with the National Plan. Once field operations commence, the capability of operators should be assessed against their plans, and exercises conducted to ensure the plans remain effective.

Arrangements should be developed to minimise duplication between the EPBC Act and the OPGSS Act Environment Regulation.

The Minister should, as the JA for the offshore area of the Territory of Ashmore and Cartier Islands, undertake a review of PTTEPAA’s permit and licence to operate at the Montara Oilfield.

For the purposes of that review, the Minister should issue a ‘show cause’ notice to PTTEPAA under s 276 of the OPGGS Act.

In carrying out a review of PTTEPAA’s permit and licence, the Minister should have regard to this Report, particularly (i) the adverse findings set out in this Chapter; and (ii) the extent to which PTTEPAA has implemented the Action Plan submitted to the Inquiry, or otherwise addressed the matter

The Minister consider legislative amendments to the OPGGS Act which make clear that

In view of the numerous well integrity problems in all of the Montara Oilfield wells, the Minister should commission a detailed audit of all the other offshore wells operated by PTTEPAA to determine whether they too may suffer from well integrity problems.
 

Procedures and accountabilities should be established to ensure, in the event of a future incident, that:
a. there is adequate monitoring of the volume of oil spilt and the spread of the oil (both surface and sub‐surface dispersed oil); and

The National Plan should be reviewed:
a. to ensure that it adequately addresses the risks associated with offshore oil and gas exploration;
b. to revisit the underlying risk assessment undertaken to inform capacity and preparedness under the National Plan;

The Inquiry also supports Bills and Agostini’s recommendation: ‘…in relation to safety case development and compliance overall, that NOPSA revise its approach to interacting with operators prior to the safety case assessment process and subsequently direct more resources into its advisory functio

The regulator should pre‐assess and review in a generic sense, and in conjunction with the offshore petroleum industry, available options for well control in the event of a blowout.

In any future similar blowout or offshore emergency situation, the Minister appoint (through either a NOPR or the relevant Department) a senior public servant to establish and oversight a central coordinating body that will facilitate interaction between regulators, industry, AMSA and the owner/o

The body established to undertake a central coordination and facilitation role in the event of any future blowout in Commonwealth waters should undertake to make all relevant information publically available from one, authoritative and easy to access source.

The National Plan should be reviewed to clarify the arrangements to apply in Commonwealth waters regarding key roles and responsibilities, including in relation to the ESC, in the event of an oil spill. This should also address any necessary training required.

DEWHA should participate in training programs and exercises relevant to an oil spill in the marine environment.

The National Plan should be revised to ensure that it fully comprehends environmental matters and that it recognises the importance of the prompt implementation of Scientific Monitoring to facilitate the assessment of the environmental impacts of an incident.

Procedures for the approval of development projects should ensure that conditions of approval are comprehensive and clearly set out the obligations of their proponents in relation to environmental matters (including expected monitoring and remediation obligations).

DEWHA, in concert with AMSA and with expert input, should develop ‘off the shelf’ monitoring programs that can be speedily implemented following incidents in Commonwealth waters.