Australian field to undergo temporary shut-in as several factors conspire to delay repairs

Production temporary shut-in at Australian field to get repairs out of the way

Singapore-headquartered Jadestone Energy has made up its mind to temporarily halt production from its field in the Timor Sea offshore Australia to complete tank repairs as several factors conspired to delay the remaining work after the output was restarted following an oil leak.

FPSO Montara Venture; Source: Jadestone Energy

Back in June 2022, Jadestone reported a small leak of oil from a crude oil tank on the FPSO Montara Venture at its Montara field off Australia. This was followed by an interim repair of the leak point in the 2C tank and a subsequent restart of production from the field. At the time, Jadestone informed that a permanent repair of the 2C tank was being advanced with work expected to start in the following days.  

Located in the Timor Sea off Australia, approximately 690 kilometres west of Darwin, the Jadestone operated and owned Montara project includes three separate fields – Montara, Skua and Swift/Swallow – which produce through a centralised FPSO Montara Venture.

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In an update from last Friday, Jadestone revealed that during preparations for the permanent repair to the 2C tank, an additional internal defect in the water ballast 4S tank was detected, adding that this would also be included in the repairs’ scope of work. The company says that the remaining scheduled inspection and repair activities to the FPSO crude oil tanks and production facilities are also being focused on, as the work has been delayed previously by limitations on available personnel during the COVID-19 pandemic.

Jadestone claims that the permanent repair to tank 2C has been developed over the past several weeks, although, it has been delayed due to weather, manpower and logistics issues, “further complicated while the facility remains in production.” The Singapore-based player explains that this has resulted in “an inability to simultaneously accommodate” the increased number of inspection and repair crews alongside production operations.

Bearing this in mind, Jadestone has taken the decision to temporarily shut in production from Montara and reorganise offshore manpower on the FPSO, enabling focus on maintenance and inspection crews. The firm elaborates that this is “the most practical and efficient way” to complete tank repairs whilst progressing ongoing inspection and remediation to other tanks in the FPSO. In addition, this also enables it to complete “key remaining scheduled inspection and repair activities” planned for this year.

According to Jadestone, these inspection and repair activities will result in production being shut-in during the remainder of August and potentially through September 2022. Prioritising these activities is expected to result in incremental costs of $2-4 million.

As a result of the Montara shut-in and the performance of the wider production portfolio year-to-date, Jadestone anticipates that 2022 production will average between 13,000 and 14,000 boe/d while the announcement on 20 June 2022 indicated that this year’s production would likely be around 15,500 boe/d. 

“The revised 2022 production guidance reflects the company’s assumption that production from its non-operated assets offshore Peninsular Malaysia will now remain shut in for the remainder of 2022, due to ongoing delays in reinstating operations,” outlined Jadestone within its statement.

The Singapore-based firm believes that taking this approach at Montara will allow it to complete the necessary work required to deliver long-term asset integrity “safely and efficiently,” as the impact is “short-term and there is no reduction in reserves. “