❓ A WA parliamentary question on notice addresses the Ungani Oilfield's production halt, ownership transfer to Sabre Energy, environmental risks, and decommissioning liabilities, prompting detailed responses from the Minister for Mines and Petroleum.
AnsweredQoN 2144Legislative Council
QuestionView source ↗
I
refer to recent announcements by Buru Energy Ltd, that Sabre Energy Ltd is
acquiring 70% ownership and operational control of the Ungani Oilfield
production and exploration assets in Petroleum Production Licences L 20 and L
21 in the Kimberley, with “a common vision to restart production from the
Ungani Oilfield as soon as practicable” (Buru Energy ASX release 17 June), and I
ask: (a) when
did the Ungani Oilfield cease production of oil; (b) which
Ungani oil wells were producing oil at the time of closure; (c) when
was the last shipment of oil from Ungani to Wyndham for export; (d) why
did the oilfield cease production, and oil exports cease; (e) given that Buru Energy has stated in its recent AGM presentation that if oil export from
Ungani recommences it will be via Broome port or Derby port, not Wyndham, what
environmental risk assessment and community consultation processes will apply
to any proposed oil export through those ports, including risks to the high
conservation value King Sound and Roebuck Bay marine environments; (f) if
the proposed restart of the Ungani oil production and export project fails, who
will be legally liable for the costs of decommissioning and rehabilitation of
the oilfield, including the 11 production and two injection wells, and other
infrastructure, and any site contamination; (g) given that Buru Energy's ASX announcement states that Sabre Energy has agreed to fund 50%
of the first $5.6 million of any future abandonment and rehabilitation costs
(ABEX) for the Ungani Production Licences, and 70% of any ABEX incurred in
excess of $5.6 million, how much above $5.6 million is the total cost estimated
by Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) to be; (h) does
Sabre Energy have the financial capacity and proven technical capability to pay
for and undertake the decommissioning and rehabilitation of the Ungani oilfield; (i) will
the Minister conduct any due diligence investigation as to Sabre Energy’s
fitness, experience, financial capacity and previous record of oilfield
management, prior to any approval of its takeover and reopening of Ungani; (j) if no to (i), why not; (k) with reference to the 2022 Appeals Convenor report (Appeal 043 of
2022) which stated, “Results of
Produced Formation Water (PFW) sampled from the Ungani oilfield in November
2020 (see Section 3.2) indicate that it contains petroleum hydrocarbons (669.4
mg/L) and monocyclic aromatic hydrocarbons (benzene, toluene, ethylbenzene and
xylene, known collectively as BTEX) (1.1 mg/L), at concentrations above
guideline investigation levels for soil and groundwater contamination. Spills
of PFW may cause soil contamination, and dependent on the size, location and
duration of the spill, may also contaminate groundwater or surface water”, has any produced formation water (PFW) sampling been conducted by the
Department (DEMIRS) at Ungani since 2020; (l) if yes to (k), what were the results and where have they been published; (m) if no to (k), why not; (n) what
volume of PFW has the Ungani Oilfield produced each year since 2020; (o) for
each of those years, referenced in (n), how has PFW from the Ungani wells been treated and
disposed of; (p) what
volume of wastewater and chemicals has Buru Energy pumped down injection wells
at Ungani for each of the past five years; (q) what
was the chemical composition of the wastewater pumped down the injection wells; (r) has
the Department conducted any sampling and testing to determine the fate and
cumulative impact of wastewater and chemicals pumped down injection wells by
Buru Energy; (s) if no to (r), why not; (t) will
the Minister release Buru Energy’s Annual Environment Report for the Ungani Oilfield and production facility for each of the last five years; and (u) if no to (t), why not?
refer to recent announcements by Buru Energy Ltd, that Sabre Energy Ltd is
acquiring 70% ownership and operational control of the Ungani Oilfield
production and exploration assets in Petroleum Production Licences L 20 and L
21 in the Kimberley, with “a common vision to restart production from the
Ungani Oilfield as soon as practicable” (Buru Energy ASX release 17 June), and I
ask: (a) when
did the Ungani Oilfield cease production of oil; (b) which
Ungani oil wells were producing oil at the time of closure; (c) when
was the last shipment of oil from Ungani to Wyndham for export; (d) why
did the oilfield cease production, and oil exports cease; (e) given that Buru Energy has stated in its recent AGM presentation that if oil export from
Ungani recommences it will be via Broome port or Derby port, not Wyndham, what
environmental risk assessment and community consultation processes will apply
to any proposed oil export through those ports, including risks to the high
conservation value King Sound and Roebuck Bay marine environments; (f) if
the proposed restart of the Ungani oil production and export project fails, who
will be legally liable for the costs of decommissioning and rehabilitation of
the oilfield, including the 11 production and two injection wells, and other
infrastructure, and any site contamination; (g) given that Buru Energy's ASX announcement states that Sabre Energy has agreed to fund 50%
of the first $5.6 million of any future abandonment and rehabilitation costs
(ABEX) for the Ungani Production Licences, and 70% of any ABEX incurred in
excess of $5.6 million, how much above $5.6 million is the total cost estimated
by Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) to be; (h) does
Sabre Energy have the financial capacity and proven technical capability to pay
for and undertake the decommissioning and rehabilitation of the Ungani oilfield; (i) will
the Minister conduct any due diligence investigation as to Sabre Energy’s
fitness, experience, financial capacity and previous record of oilfield
management, prior to any approval of its takeover and reopening of Ungani; (j) if no to (i), why not; (k) with reference to the 2022 Appeals Convenor report (Appeal 043 of
2022) which stated, “Results of
Produced Formation Water (PFW) sampled from the Ungani oilfield in November
2020 (see Section 3.2) indicate that it contains petroleum hydrocarbons (669.4
mg/L) and monocyclic aromatic hydrocarbons (benzene, toluene, ethylbenzene and
xylene, known collectively as BTEX) (1.1 mg/L), at concentrations above
guideline investigation levels for soil and groundwater contamination. Spills
of PFW may cause soil contamination, and dependent on the size, location and
duration of the spill, may also contaminate groundwater or surface water”, has any produced formation water (PFW) sampling been conducted by the
Department (DEMIRS) at Ungani since 2020; (l) if yes to (k), what were the results and where have they been published; (m) if no to (k), why not; (n) what
volume of PFW has the Ungani Oilfield produced each year since 2020; (o) for
each of those years, referenced in (n), how has PFW from the Ungani wells been treated and
disposed of; (p) what
volume of wastewater and chemicals has Buru Energy pumped down injection wells
at Ungani for each of the past five years; (q) what
was the chemical composition of the wastewater pumped down the injection wells; (r) has
the Department conducted any sampling and testing to determine the fate and
cumulative impact of wastewater and chemicals pumped down injection wells by
Buru Energy; (s) if no to (r), why not; (t) will
the Minister release Buru Energy’s Annual Environment Report for the Ungani Oilfield and production facility for each of the last five years; and (u) if no to (t), why not?
AnswerView source ↗
Answered
15 October 2024
Responded by
Leader of the House representing the Minister for Mines and Petroleum
Response time
9 days
(a) 24 August 2023;
(b) Ungani 1 ST1, Ungani 2, Ungani 5, and Ungani 7H wells;
(c) 27 August 2023;
(d) The reasons that led to suspension of production from Ungani Field are mainly:
· Several temporary suspensions of production resulting from the very widespread and heavy rainfall across the Kimberley region associated with Tropical Cyclone Ellie in January 2023 and the consequential flooding and damage to the export route for Ungani crude along the Great Northern Highway and the destruction of the bridge over the Fitzroy River at Fitzroy Crossing.
· The Electrical Submersible Pump in the Ungani 7H well unexpectedly failed on 23 July 2023 and resulted in the rate of oil production from the field dropping to a marginal economic rate.
(e) Trucking of crude oil, dependant on its flashpoint, is regulated under the Dangerous Goods Safety Act 2004 . Other legislation administered by Department of Transport and Department of Water and Environmental Regulation provides for the protection of the environment, associated with spills from trucking or offloading at ports.
(f) Buru and Sabre will each be responsible for their share of future decommissioning liabilities in relation to Ungani licences.
(g) The Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) was provided an estimate of the total cost of decommissioning and rehabilitation activities from Buru Energy of $7.37 million. Therefore, the additional cost above $5.6 million is about $1.77 million.
(h) In support of the transfer applications to add Sabre Energy as a registered holder of L 20 and L 21, Sabre Energy are required to provide details of the financial resources that are or will be available, as well as the technical qualifications and technical advice that is or will be available to Sabre Energy. DEMIRS’ assessment of the information will include an assessment of Sabre Energy and Buru Energy’s joint capacity to undertake decommissioning and rehabilitation.
(i) Yes, as above, the assessment of the transfer applications will be undertaken in accordance with section 72 of the Petroleum and Geothermal Energy Resources Act 1967
(j) Not applicable.
(k) No.
(l) Not applicable.
(m) Sampling of PFW is undertaken by Buru Energy as the operator of the activity and is analysed for water and hydrocarbon content. The integrity of the two injection wells and related above-ground infrastructure is monitored by DEMIRS. Buru Energy is obligated to report incidents to DEMIRS. No significant spills of produced formation water have been reported to DEMIRS since November 2020.
Year
Water Production (kL)
2020
490,107
2021
723,851
2022
730,500
2023
213,772
(n) The volumes for the years 2020 to 2023 is set out in the table below:
Year
Water Production (kL)
2020
490,107
2021
723,851
2022
730,500
2023
213,772
(o) Produced water from the Ungani Facility is physically separated from the oil stream by the separation process. Oil that may be recovered by this process is returned via a flowline to the stock tanks. The primary method for disposal of produced water will be via reinjection into the Ungani 3 or Ungani West 1 wells. The Ungani Central turkeys’ nest may also be used for temporary storage of produced water.
All chemicals within the produced water reinjected have been fully disclosed in accordance with Regulation 15(9) of the Petroleum and Geothermal Energy Resources (Environment) Regulations 2012 and Chemical Disclosure Guideline.
(p) The volumes for the years 2019 to 2023 is set out in the table below. The requested chemical volumes were not available for 2019. In 2020, the Annual Environment Report (AER) guidelines were updated and this brought in a requirement for operators to report on the actual chemical volumes used (in each reporting period).
Year
WAPIMS: Water Injection (kL)
Buru AER: Water Injection (kL)
Chemicals (kL)
2019
344,714
345,078
Data not available
2020
485,284
490,702
68
2021
734,720
739,907
66
2022
771,179
771,304
23
2023
217,248
215,958
9
(q) The chemical composition of treated produced formation water is set out on page 20 of the publicly available Ungani Production Facility Commissioning and Operations Environment Plan summary document, available from the DEMIRS website at the following URL: ace.dmp.wa.gov.au/ACE/Public/PetroleumProposals/ViewPlanSummary?registrationId=113880 .
To assist the member, this has been tabled.
(r) No.
(s) Quarterly sampling of groundwater is undertaken by Buru Energy from 6 wells and a range of field and laboratory parameters are measured, including cations, anions, metals and hydrocarbons.
(t) No.
(u) Annual Environmental Reports may contain confidential or commercially sensitive information that is not suitable for release.
(b) Ungani 1 ST1, Ungani 2, Ungani 5, and Ungani 7H wells;
(c) 27 August 2023;
(d) The reasons that led to suspension of production from Ungani Field are mainly:
· Several temporary suspensions of production resulting from the very widespread and heavy rainfall across the Kimberley region associated with Tropical Cyclone Ellie in January 2023 and the consequential flooding and damage to the export route for Ungani crude along the Great Northern Highway and the destruction of the bridge over the Fitzroy River at Fitzroy Crossing.
· The Electrical Submersible Pump in the Ungani 7H well unexpectedly failed on 23 July 2023 and resulted in the rate of oil production from the field dropping to a marginal economic rate.
(e) Trucking of crude oil, dependant on its flashpoint, is regulated under the Dangerous Goods Safety Act 2004 . Other legislation administered by Department of Transport and Department of Water and Environmental Regulation provides for the protection of the environment, associated with spills from trucking or offloading at ports.
(f) Buru and Sabre will each be responsible for their share of future decommissioning liabilities in relation to Ungani licences.
(g) The Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) was provided an estimate of the total cost of decommissioning and rehabilitation activities from Buru Energy of $7.37 million. Therefore, the additional cost above $5.6 million is about $1.77 million.
(h) In support of the transfer applications to add Sabre Energy as a registered holder of L 20 and L 21, Sabre Energy are required to provide details of the financial resources that are or will be available, as well as the technical qualifications and technical advice that is or will be available to Sabre Energy. DEMIRS’ assessment of the information will include an assessment of Sabre Energy and Buru Energy’s joint capacity to undertake decommissioning and rehabilitation.
(i) Yes, as above, the assessment of the transfer applications will be undertaken in accordance with section 72 of the Petroleum and Geothermal Energy Resources Act 1967
(j) Not applicable.
(k) No.
(l) Not applicable.
(m) Sampling of PFW is undertaken by Buru Energy as the operator of the activity and is analysed for water and hydrocarbon content. The integrity of the two injection wells and related above-ground infrastructure is monitored by DEMIRS. Buru Energy is obligated to report incidents to DEMIRS. No significant spills of produced formation water have been reported to DEMIRS since November 2020.
Year
Water Production (kL)
2020
490,107
2021
723,851
2022
730,500
2023
213,772
(n) The volumes for the years 2020 to 2023 is set out in the table below:
Year
Water Production (kL)
2020
490,107
2021
723,851
2022
730,500
2023
213,772
(o) Produced water from the Ungani Facility is physically separated from the oil stream by the separation process. Oil that may be recovered by this process is returned via a flowline to the stock tanks. The primary method for disposal of produced water will be via reinjection into the Ungani 3 or Ungani West 1 wells. The Ungani Central turkeys’ nest may also be used for temporary storage of produced water.
All chemicals within the produced water reinjected have been fully disclosed in accordance with Regulation 15(9) of the Petroleum and Geothermal Energy Resources (Environment) Regulations 2012 and Chemical Disclosure Guideline.
(p) The volumes for the years 2019 to 2023 is set out in the table below. The requested chemical volumes were not available for 2019. In 2020, the Annual Environment Report (AER) guidelines were updated and this brought in a requirement for operators to report on the actual chemical volumes used (in each reporting period).
Year
WAPIMS: Water Injection (kL)
Buru AER: Water Injection (kL)
Chemicals (kL)
2019
344,714
345,078
Data not available
2020
485,284
490,702
68
2021
734,720
739,907
66
2022
771,179
771,304
23
2023
217,248
215,958
9
(q) The chemical composition of treated produced formation water is set out on page 20 of the publicly available Ungani Production Facility Commissioning and Operations Environment Plan summary document, available from the DEMIRS website at the following URL: ace.dmp.wa.gov.au/ACE/Public/PetroleumProposals/ViewPlanSummary?registrationId=113880 .
To assist the member, this has been tabled.
(r) No.
(s) Quarterly sampling of groundwater is undertaken by Buru Energy from 6 wells and a range of field and laboratory parameters are measured, including cations, anions, metals and hydrocarbons.
(t) No.
(u) Annual Environmental Reports may contain confidential or commercially sensitive information that is not suitable for release.
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