The Federal Government is still discussing with industry what to do with the Northern Endeavour oil production vessel in the Timor Sea almost six months after its owner went into liquidation.
The vessel has been in so-called lighthouse mode since February at the cost of about $4 million a month for the minimum crew to maintain safety.
The responsibility for the vessel and the Laminaria-Corallina oil fields was foisted on the Government after administrators failed to rescue the company after five months of effort.
Woodside agreed to sell the asset to the newly-formed Northern Oil and Gas Australia in September 2015, just two months after it was publicising its plans to decommission the vessel. Woodside paid NOGA $24 million to take the asset off its hands.
Numerous safety issues on the Northern Endeavour caused offshore safety regulator NOPSEMA to order production be shut down in July 2019 until the operation could be made safe. The loss of revenue combined with the single-asset company's lack of liquidity resulted in NOGA management calling in administrators in September 2019.
The cost to decommission the Northern Endeavour, wells and subsea equipment has been estimated to be as high as $230 million.
Creditors of NOGA are owed a further $165 million.
Department of Industry, Science, Energy and Resources deputy secretary Mike Lawson told the Senate economics estimates committee in March that the Government did not have "even a rough order of magnitude of the likely cost."
"We are working with industry; we have no reason to believe we can't find a better solution to this than...a cost being imposed on the taxpayer," Lawson said.
Four months later the Department did not answer whether it now had an estimate for the total cost to Government.
"The Government is working with industry to undertake the necessary planning on a longer-term solution for the Northern Endeavour FPSO and Laminaria-Corallina fields, including costs and timeframes," a Department spokesperson said.
The Department also did not say if it expected to have to extend the contract with Upstream Production Solutions to keep the Northern Endeavor in lighthouse mode beyond the current end of October expiry.
Minister for Resources Keith Pitt in June received an independent review of the circumstances which led to the administration and subsequent liquidation of the NOGA group of companies. The Minister is considering the report.
There has been talk that the Federal Government was considering a levy on the offshore oil and gas industry rather than have Australian taxpayers foot the decommissioning bill.
Boiling Cold understands that some senior members of APPEA, the lobby group for big oil and gas companies in Australia, are unimpressed that Woodside's actions five years ago may impact them financially.
Main image: Northern Endeavour floating production, storage and offloading vessel in the Timor Sea. Source: Northern Oil and Gas Australia Pty Ltd.