EPA wins case to stall exit of oil industry vessel from Tui field off Taranaki

Tuesday, 7 April 2020

The Umuroa is attached to several lines and pipes, but it doesn't own that infrastructure and wants to disconnect from it and leave the field. (File photo)

An oil industry vessel left holding the pipes when another company went bust, cannot cap the pipes and lay them on the sea floor so the ship can leave New Zealand, at least for now.

The High Court has sided with the Environmental Protection Authority which issued abatement notices against the Umuroa, a floating production storage and offtake installation vessel, uncoupling to leave before winter.

A diagram from the High Court judgment showing the pipes that connect the Umuroa to seabed oil wells.

BW Offshore owns the vessel which another company, Tamarind Taranaki, used as part of its oil business.

Tamarind owns the pipework linking the Umuroa to the oil wells in the Tui field off the Taranaki coast, but Tamarind has gone into liquidation.

The steps necessary before the Umuroa can leave the Tui oil field have become a point of contention. (File photo)

* Jobs at stake after Tamarind Resources end contract at offshore production facility

* Taranaki offshore oil exploration company placed under voluntary administration

* Iwi upset at possible seabed dumping of failed oil and gas company's equipment**

BW Offshore wants to remove the Umuroa but to do that it has to uncouple the pipes. It thought it had permission to do that under a 2017 Environmental Protection Authority decision.

It started the work last November but the EPA said the circumstances had changed and it issued an abatement notice to stop the disconnection.

The original permission was for the undersea pipes, connectors and lines to be left on the sea floor when switching ships. But if the oil field is decommissioned the pipes and other gear might be left on the sea floor.

The condition of some of the gear is in doubt and there has already been one discharge from a tear in a flowline.

BW Offshore appealed against the abatement notices, with the Environment Court agreeing to prevent the notices taking effect.

The EPA in turn appealed to the High Court to get the abatement notices back in place.

In a decision issued on Wednesday, Justice Francis Cooke sided with the EPA. The EPA's hands could not be tied to allow adverse effects to take place based on an earlier decision that had been given in different circumstances, he said.

The judge also thought the Environment Court had been wrong to accept BW Offshore's arguments that there were clear limits over what it could be expected to do, as the 'meat in the sandwich' in relation to the decommissioning of the oil mining activities overall.

Oil mining had to be brought to an end in an appropriate way environmentally.

'That is saying no more than people must tidy up any activity before they leave,' the judge said.

BW Offshore's ultimate appeal might succeed but it was not safe to proceed without a full understanding and assessment of all the technical matters that could be relevant.

BW Offshore said that even if the contents of the pipes, which it said was mostly water, leaked it would still be within allowable levels. But the judge said that seemed to be based on certain assumptions that the court was unable to assess. And that was just one aspect of the changed circumstances.

The court was told that if the Umuroa stays in the oil field over winter it will be unmanned, and perhaps uninsured, but the judge said an experienced international operator like BW Offshore would be able to make it safe.

He acknowledged that making the Umuroa stay in the meantime would come at a considerable cost for BW Offshore.