Santos pleads guilty over Varanus Island dead dolphin oil spill

Santos has been convicted of substandard operations leading to an oil spill after a WA government regulator charged it over a 2022 oil spill off the Pilbara coast and fined $10,000.

The Adelaide-based company plead guilty in the Karratha criminal court on Monday to a charge of "failing to operate its licensed pipeline in a proper and workmanlike manner, failing to prevent the escape of petroleum."

Santos was fined $10,000 and ordered to pay $9700 in court costs, according to the Department of Energy, Mines, Industry Regulation and Safety.

 In March 2022, three dead dolphins were found floating near an oil slick caused by the leak of 25,000 litres of condensate through a gaping hole in a hose used to load oil tankers.

The spill went unmentioned by both WA regulators and Santos and only became public knowledge through a media report two weeks later in WAtoday.

The report pointed to Santos' failure to replace the hose despite Santos knowing it had a weak point from a kink that developed when it was lifted incorrectly some years beforehand.

The Adelaide-based oil and gas producer then said "the impact on the environment is negligible," and failed to mention the dead dolphins.

Six months after the incident, when the dolphin deaths became public knowledge, the company said the carcasses were seen a couple of hours after the spill "in which time no harm would have resulted from this incident."

Whistleblower: "They could not have known the real scale of impact, it was never checked."

The dolphins were found within 200m of the slick 17 hours after Santos started pumping oil through the loading hose, according to the regulator DEMIRS.

Conservation Council of WA fossil fuels campaigner Anna Chapman said the conviction was a reminder of the environmental impacts of offshore oil and gas production.

“This was the second catastrophic oil spill in WA’s ocean in the past 15 years - we can’t risk a third at Scott Reef, where Woodside’s Browse Gas proposal threatens the endangered whales, turtles, sea snakes and other marine life that rely on it for survival," she said.

A year after the spill, an anonymous whistleblower accused Santos of a coverup in a statement tabled in the Federal Parliament.

The whistleblower said in addition to dead dolphins, Santos's staff witnessed sea snakes writhing in agony and challenged Santos's claim of negligible environmental damage.

"In defiance of their obligations, Santos had not mobilised environmental assessors to the island until a week after the incident," he said.

"They could not have known the real scale of impact, it was never checked."

He also called Santos' claim that the spill did not harm the dolphins "an outright lie."

"I was appalled at the culture and management within Santos, which demonstrated such wilful refusal to accept responsibility."

Crews that lifted the loading line from the seabed to connect it to arriving tankers were unaware of the correct technique to use, according to a statement from DEMIRS.

"Santos’ failures ... included insufficient monitoring of condensate loading operations, as well as failing to conduct an adequate investigation of the pipeline’s fitness for purpose."

DEMIRS said Santos had improved its practices since the spill.

Santos' guilty plea contrasts with the conclusion of its own investigation, released in early 2024: "We did not find any evidence to substantiate the allegations raised, but we identified gaps in our internal control and communication processes."

A Santos spokeswoman said it takes its environmental and regulatory responsibilities very seriously and deeply regrets the spill from the loading line.

"The incident occurred about two months before that part of the line was scheduled to be replaced," she said.

"It had been maintained in accordance with the prescribed service life,

"Prior to the rupture, regular surveys showed no damage or deformation of that part of the line."

Updated 6 January: Comments from the Conservation Council of WA added.