The failure of Cliff Head's owners, Pilot Energy and Triangle Energy, to meet payroll does not bode well for their ability to pay the $200 million decommissioning cost.
Pilot Energy and Triangle Energy - two listed minnows with no revenue - may struggle to afford to decommission the Cliff Head platform off the WA coast.
A week after Pilot Energy folded, its partner, Triangle Energy, has followed, unable to meet its legal requirements to pay for the $200 million decommissioning of the Cliff Head oil platform, wells, and pipelines.
In a statement to the ASX on Tuesday morning administrator Bryan Hughes from 101 Advisory said the company decided to appoint him "in light of Triangle’s inability to meet its potential decommissioning obligations under the Offshore Petroleum and Greenhouse Gas Storage Act."
A 2025 report for the Federal Government put the likely cost at $200 million, but Centre for Decommissioning Australia chief executive Francis Norman said "it could be way more," according to The West Australian.
Neither Triangle or its junior 21 per cent partner Pilot recognised any decommissioning liability in their financial accounts.
Many in the oil and gas industry long expected that the two tiny companies would fail, likening the outcome to the Northern Endeavour oil production vessel in the Timior Sea.
Its financially weak owner Northern Oil and Gas Australia went into administration in 2020 leaving the Federal Government with a billion-dollar decommisioning bill that was passed onto the industry in the form of a legislated levy.
Last week Federal Resources minister Madeleine King said "under no circumstances will taxpayers be left on the hook” for Cliff Head.
“In the event of companies being unable to pay, I will have no hesitation in extending the Northern Endeavour levy or taking other measures to cover all costs for decommissioning,” she said.
After Pilot Energy entered voluntary administration, offshore safety regulator NOPSEMA directed Triangle to ensure essential workers were paid and the facilities 11km off the coast near Dongara were kept safe.
Now that both owners of Cliff Head are in acknowledged financial difficulty, Boiling Cold asked NOPSEMA what it was doing to protect workers and the environment from the shuttered facilities.
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday, The Guardian and Boiling Cold, winning five WA Media Awards.
The failure of Cliff Head's owners, Pilot Energy and Triangle Energy, to meet payroll does not bode well for their ability to pay the $200 million decommissioning cost.
Pilot Energy and Triangle Energy - two listed minnows with no revenue - may struggle to afford to decommission the Cliff Head platform off the WA coast.
No profit, falling production, inadequate maintenance, a safety plan in limbo and a big clean-up if exploration fails: challenges aplenty at the Canadian company's only offshore facility.
Peter Milne
Peter Milne
