Fresh alarm over sale of Maari oil field
Greenpeace has renewed its call for the Government to block the sale of the offshore Maari oil field to Singaporean firm Jadestone Energy after the company was involved in an oil spill in Australia in June.
Austrian oil giant OMV agreed in 2019 to sell its 69% interest the Maari field, which may be nearing the end of its productive life, to Jadestone.
The deal, worth at least
US$50 million (NZ$82M), would have Jadestone take over the operation of Maari but Ministry of Business, Innovation and Employment (MBIE) petroleum manager Susan Baas said it had yet to decide whether to recommend the Government approve the change of ownership and operator.
In June, Australia’s National Offshore Petroleum Safety and Environmental Management Authority (Nopsema) ordered Jadestone to stop offloading fuel at its Montara oil field northwest of Darwin after Jadestone reported spilling a few thousand litres of oil.
Nopsema’s prohibition notice said its inspections showed a cargo tank holding 10,000 cubic metres of oil had ‘‘structural integrity issues’’, and there was the risk of an immediate and significant threat to the environment.
Production resumed at Montara in July after a temporary fix was put in place but has since been suspended after a further defect was found and the company decided to focus on remediation work.
Last year, Nopsema ordered Jadestone to review its management of corrosion at the oil field after saying it was not satisfied with the results of inspections.
Failings included Jadestone not taking sufficient action to identify corrosion-related hazards, ‘‘errors and omissions’’ in its calculations for servicing pipelines, and failures to show infrastructure was being suitably maintained.
In 2020, a separate spill at Jadestone’s Stag oil field, off Australia’s North West Shelf, resulted in Nopsema issuing Jadestone with a number of directions, including reviewing and updating systems ‘‘to ensure an adequate level of oil spill response training and competency’’.
Nopsema estimated up to 1288 litres of oil had leaked at Stag and said Jadestone did not adequately implement oil-spill response arrangements and had underestimated the ‘‘full extent and duration’’ of the spill.
Greenpeace Aotearoa campaign head Amanda Larsson said Jadestone had ‘‘a history of reckless management at its oil fields’’, an assertion the company rejected.
Greenpeace first objected to Jadestone taking over the Maari field in 2020, describing it as a ‘‘small oil company that specialises in buying old oil fields for rock bottom prices to eke out the last drops of fossil fuels before the field is abandoned for good’’.
‘‘Given its recent track record in Australia, we clearly cannot trust Jadestone to safely manage the ageing Maari field or do a proper job of decommissioning the site when it comes to the end of its life,’’ Larsson said.
Jadestone Energy is listed on London’s junior AIM sharemarket, with a market value of about £410m (NZ$778M).
The company said in a statement that it ‘‘rapidly actioned’’ the directives given to it by Nopsema last year, and placed the safety of people and the environment above all else.
‘‘Where issues with offshore infrastructure have been identified, Jadestone has responded quickly with mitigations and developed permanent solutions,’’ it said.
‘‘Jadestone has a safety-first culture, and targets zero safety incidents and zero environmental impacts at all times.’’
Jadestone was one of the largest independent oil companies listed on London’s AIM market and had high governance standards overseen by a highly experienced independent board of directors, it also said.
It made environmental sense to focus on extracting oil from existing oil fields rather than opening new ones, and it had invested more than US$350M in Stag and Montara to improve the facilities’ integrity and increase production, it said.
Jadestone said it was concerned about the time it was taking for its application to take over Maari to be evaluated, saying that was ‘‘detrimental to the potential upside we see in the Maari field, which would be developed for the benefit of all stakeholders’’.
The company was continuing to ‘‘respond promptly to information requests and engages constructively with MBIE to complete the Maari acquisition as soon as possible’’, it said.
Last year, Energy Minister Megan Woods estimated taxpayers would be left with a $349 million bill to decommission the Tui oil field after Tamarind, a Malaysianowned company that bought the field to manage it during its final years and shut it down, folded before that work was complete.
But a law change has subsequently been passed that ensures that if an oil company on-sells a permit along with the responsibility to clean up a site, the responsibility to decommission the field will bounce back to the previous owner if the buyer of the permit does not fulfil that obligation for any reason.
OMV said in a statement that it undertook a review of Jadestone when it agreed to sell its stake in Maari in 2019 and was satisfied with the firm’s operational credentials.
‘‘The Maari transaction is still with New Zealand authorities and pending approval, which also includes an operational capability assessment,’’ it noted.