Potential $3m loss from 30mm hole in oil tank

An oil spill occurred on June 17th from offshore processing ship Montara Ventur (IMO 8714982) at the Jadestone’s Montara field during a crude oil transfer between two tanks on the FPSO, forcing the company to shut down the production from the offshore field.

Oil was observed on the surface of the sea adjacent to the FPSO during the transfer. Transfer operations were ceased immediately and production from the Montara fields was shut down temporarily as a precautionary measure.

The release of oil into the sea was halted quickly by pumping water into the tank, which indicated a leak somewhere at the tank base. A subsequent inspection by an ROV confirmed the existence of a 30mm diameter hole in the bottom of the tank.

The next step will be to apply a temporary repair in order to remove the remaining oil from the tank. Following this the tank will be accessed and cleaned in order to complete an inspection and permanent repair.

After the response team from Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) inspected the facility last Tuesday it concluded that an “immediate and significant threat to the environment” existed, because the cargo oil tank was at risk of structural integrity failure. A temporary containment device as plugging the hole, with the tank holding 10,000 cubic metres of petroleum.

“Based on this known failure it is now reasonable to conclude that the structural integrity of the remaining cargo oil tanks is uncertain,” said NOPSEMA.

The volume of released oil was estimated at only three to five cubic metres, which was monitored and had fully dispersed by the morning of June 19th. Jadestone said that it expected to complete the tank inspection and repairs in about four weeks. It added that the cost of securing the leak site and permanent repairs was estimated at between $2m to $3m.

Jadestone was working with the class inspector, NOPSEMA and other stakeholders to develop and execute a plan to safely and permanently repair the hole in the crude oil tank.

Any oil leakage in the Montara area is sensitive because in 2009 a blowout on a Montara wellhead platform led to a 75-day long leak estimated at up to 2,000 bpd. A legal dispute between Indonesia and Australia over the matter continues to this day.

1990-built, Australia-flagged, 77,702 gt Montara Venture is owned and managed by Jadestone Energy Eagle Pty Ltd of Perth, Western Australia. It is entered with Standard Club (Standard Offshore Division) on behalf of Jadestone Energy (Eagle) Pty Ltd.