PTT Exploration & Production Pcl delayed its fourth attempt to plug a well spilling oil into the Timor Sea off Western Australia's Kimberley coast, estimated to be home to the world's largest population of humpback whales.
The bid to seal the leak from the well 2,600 meters (1.6 miles) below the seabed, originally set for today, was put off until the weekend after studying the results of drilling at the site, PTTEP said in a statement today. The Bangkok-based company may have to book costs of $20 million to $50 million in the third quarter for insurance claims, DBS Vickers Securities said in an October 16 note.
Technical experts have recommended the use of a specialised guidance tool to intercept the leak, PTTEP said. Oil, gas and condensate began seeping into the Timor Sea from the well on August 21. It may be spilling as much as 3,000 barrels of oil a day, Greens Senator Rachel Siewert said yesterday, citing information sourced by the party. That's up to 10 times higher than the estimate from PTTEP, which puts the flow at about 300 to 400 barrels a day.
"These events shouldn't happen and the industry places great importance on ensuring that they do not happen," Mark McCallum, deputy chief executive of industry body the Australian Petroleum Production & Exploration Association, said by e-mail today. The Montara well leak is the first incident of its type in over 25 years, he said.
Australia's most-severe recorded spill was when the tanker Kirki lost its bow off the coast of Western Australia in 1991, leaking about 17,280 tonnes of light crude into the sea, according to the Australian Maritime Safety Authority's Web site. The Princess Anne Marie lost 14,800 tonnes off Western Australia in 1975 after a crack to her hull. The Montara spill of 10 million litres, as estimated by the Greens, would be about 8,800 tonnes.
Humpback Whales
The world's largest population of humpback whales, estimated at about 22,000, is found along the Kimberley Coast, according to a May-September survey conducted by whale experts Richard Costin and Annabelle Sandes, partly funded by the World Wildlife Fund. Tourism Australia has described region as "one of the world's last true wilderness areas."
The Montara well is in water 83 meters deep and some 690 kilometers from Darwin in the Northern Territory and 250 kilometers from Truscott on Australia's northwestern Kimberley Coast. About 300 people are working on addressing the spill, PTTEP has said. Seventeen vessels and nine aircraft, including a Boeing 747, have been used in the operation since August 21.
PTTEP would have to book costs associated with the Montara oil leak in the third quarter before receiving insurance claims in the fourth quarter and in 2010, DBS Vickers Securities analyst Vichitr Kuladejkhuna said in a note to clients. The company is due to report results next week.
The cost of the cleanup by the Australian Maritime Safety Authority, has reached A$5.3 million ($4.9 million), a Senate hearing heard this week. PTTEP has said it will pick up the bill for the operation.
Oil Removal
By October 20, 457,000 litres of oil product, including 277,000 litres of oil, had been removed from the ocean, the maritime safety authority said. Aerial surveillance shows oil about 201 kilometers from the Western Australian coast and 257 kilometers off Indonesia, it said. The oil currently poses no threat to environmentally sensitive reef areas, the authority said October 21.
PTTEP has drilled a relief shaft at the Montara field to intercept the leaking well and plug it, and intends to halt the flow by injecting heavy mud. The opposition Liberal Party has called on the government to intervene in the operation should today's bid fail.
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