Production restart delayed at Australian offshore field

Independent Jadestone Energy has seen restart of production at its shut-in Montara oilfield offshore Australia delayed beyond its hoped-for February, despite making solid progress with repair work on the field’s floating production, storage and offloading vessel, with the operator citing weather issues as a factor.

The field has been shut in since August last year following a small leak two months before.

Singapore-headquartered Jadestone confirmed that good progress has been made on the Montara Venture FPSO’s tank repairs, while Australia’s offshore regulator, the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema), in February closed its General Direction that saw Jadestone bring in Norwegian classification society DNV as an independent reviewer for the Montara floater.

Nopsema had to be satisfied with the so-called ‘gap recognition review’ report that was intended to assure Jadestone’s remediation plans and operational readiness prior to the restart of production operations via the FPSO.

“This [approval] has allowed a focus on the scheduled topsides maintenance workstreams, although this activity has been impacted by recent severe weather conditions offshore northern Australia,” noted Jadestone.

“While planned progress has generally been good, several days have been lost to weather-related delays and production restart, which was previously expected by the end of February, has been impacted accordingly.”

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The Montara operator added it would make a further announcement once the oilfield was back on stream.

On a brighter note, Jadestone last week completed its acquisition of a 9.52% non-operated interest in the producing Sinphuhorm gas field and a 27.2% interest in the Dong Mun gas discovery, both onshore Thailand.

Due to an effective date of 1 January 2022, the headline cash consideration of $32.5 million became $27.8 million on completion, due to customary closing adjustments.

The Sinphuhorm acquisition adds 4.6 million barrels of oil equivalent 2P reserves at the effective dat5e and approximately 1600 barrels of oil equivalent per day of net production based on current rates.

Jadestone said the transaction is a first step towards creating a “significant natural gas component” within its portfolio over the medium-term and “establishes a low-cost platform for growth in Thailand”.

Also in February, Jadestone closed a US$50 million debt facility with two international banks, which is a key element of the company’s medium-term financing strategy to fund development capital for its Akatara field development in Indonesia and further growth through mergers and acquisitions.