Norwegian energy giant Equinor answers the Great Australian Bight oil drilling questions

It’s the question that has divided SA: Should drilling be allowed in the Great Australian Bight? Norwegian energy giant Equinor wants to drill, but many oppose them. The company’s Australian manager Jone Stangeland answers some of the essential questions.

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• Great Australian Bight oil drilling explained

It’s the question that has divided South Australia: Should drilling be allowed in the Great Australian Bight?

Norwegian energy giant Equinor wants to drill in the pristine waters, but many councils, environmental groups and everyday South Aussies oppose its plans.

The company’s Australian manager Jone Stangeland answers some of the essential questions, before The Wilderness Society respond in this week’s Sunday Mail.

Q1. How much oil does Equinor believe is in the Great Australian Bight?

The aim of the planned drilling activity is to confirm if there is oil or gas in the area. Our world-class geologists have analysed a large amount of data about the Ceduna Sub-basin and have determined that there might be billions of barrels of oil there. It’s only through exploration drilling that we can determine the potential of the area.

Q2. If exploration reveals significant oil reserves, how may rigs would eventually be deployed to mine that oil? Dozens, hundreds, thousands?

It is difficult to predict what a significant discovery will mean for the region.

But one way to understand the potential is to look at places where big discoveries have been developed.

The Bass Strait oilfields near Melbourne and the North-West Shelf in Western Australia are two good Australian examples.

More than 1,000 wells have been safely drilled in the Bass Strait, comprising of the Gippsland, Bass and Otway Basins.

There are 23 offshore platforms and installations in Bass Strait, feeding a network of 600 kilometres of underwater pipelines.

A recent study commissioned by the Australian Petroleum Production and Exploration Association (APPEA), conducted by ACIL Allen, provided a preliminary assessment of the economic potential of successful petroleum exploration and production in the Great Australian Bight.

In its report, a high case scenario assumed that four projects will be developed in the Great Australian Bight, leading to an 18 per cent increase in the size of the South Australian economy.

Q3. How many Australia jobs does Equinor estimate drilling in the Bight would create?

We are early in the exploration phase and we do not know if we will find is oil or gas.

But if oil or gas is discovered in the Great Australian Bight, South Australians can expect new jobs to be created as well as rich opportunities for local suppliers and contributions to tax revenue for the Federal and State governments.

In 2018, APPEA published a study by ACIL Allen looking at the potential economic impacts from oil and gas in the GAB.

Based on the base case scenario of 1.9 billion barrels of oil, Australia’s GDP could increase by A$5.9 billion per year, with 1,361 jobs created during the construction phase.

It would also generate $1.7 billion in tax income every year.

Q4. How many of those jobs would be based locally in regional South Australia?

Our proposed well is located far from shore in the Ceduna Sub-basin, but we believe towns along the Eyre Peninsula are uniquely positioned to benefit from our activities.

We have already made plans to use Ceduna airport as the base for helicopters servicing the Stromlo-1 rig.

Ceduna and other towns in the area will have a strategic advantage in competing for local contracts if there is a major oil discovery in the Bight.

Q5. Does the drill rig sit on pylons which stretch to the sea floor? If not, how does it work?

For drilling Stromlo-1 we will probably use a rig that floats on semi-submersible pontoons.

It uses dynamic thrusters to maintain its position during the drilling program without any need for anchoring in deep water.

Once the rig is on site, we will use a combination of satellite GPS, gyroscopes and seabed transponders to stay on location.

Q6. How much money could this plan possibly net the Australian Government?

We are early in the exploration phase and we do not know if we will find oil or gas, but an ACIL Allen report recently developed for APPEA estimates that successful petroleum exploration and production in the Great Australian Bight could generate billions of dollars in Commonwealth and State taxation payments.

Q7. Both BP and Chevron have walked away from plans to drill in the Bight — why has Equinor stuck with their plan?

More than anything we are excited by the opportunity to explore the potential of the Great Australian Bight.

We have a good understanding of the geology in the permit area and we believe there could be a petroleum resource there.

We have spent two years preparing our Environment Plan to understand the environment in the Great Australian Bight and we are confident we can explore the area safely.

Q8. Have you been surprised by the level of opposition to plans to drill in the Bight?

We recognise there are a range of views about exploration in the Bight.

Over the last two years, we have held over 130 meetings with community stakeholders who were keen to understand our plans and share their views with us. Understandably, everyone wants assurances that this can be done safely, and we agree we have a responsibility to protect the environment and communities.

We welcome everyone’s feedback, that’s why we have voluntarily published our draft Environment Plan and invited the public to comment on our plans.

We will continue to engage broadly with the community as we continue our preparations.

Q9. In the event of an emergency, your own estimates have capping taking 15 days — how does this compare to international standards?

There is a lot of attention on capping stacks, but it’s important to highlight that the capping stack is only one aspect of a comprehensive safety plan for our rig.

Our priority is to ensure that a capping stack is never needed by preventing any well control incidents through careful planning.

Secondly, we will install a 400-tonne blowout preventer before we drill, which can shut in the well in minutes, which is our first line of defence and a highly effective way to respond to a loss of well control.

In the extremely unlikely event of the blowout preventer failing, we will fly in a capping stack. By having a construction vessel onsite, we have reduced the response time to 15 days compared to typical 30-40 days.

Q10. How can you ensure this will not tarnish South Australia’s clean/green reputation?

The Great Australian Bight is home to a rich marine environment and sustains several other industries, including fisheries and tourism.

This all needs to be protected.

After all our research, consultation and planning, our EP concludes we can drill safely without harming the environment.

Q11. Is that 15-day capping estimate dependent on weather?

No. We can have a capping stack on site in 15 days regardless of weather.

A big part of our response plan is having a construction vessel on site.

The construction vessel is a larger, multipurpose ship that can lift and manoeuvre heavy equipment steadily onto the sea floor with a crane that can compensate for high waves.

It is not usual to have a construction vessel on site for this kind of operation, but Equinor has committed to this additional safety measure.

Q12. If there was a spill, how could it ever be cleaned up given the high cliffs and rugged rocky coastline that’s prevalent in the area?

At Equinor, we are determined to prevent all accidents. For us, any oil spill is unacceptable. A major oil spill is extremely unlikely, and the chance of shoreline contact is even more remote. Our response plan aims to stop the oil from ever reaching shore.

Nevertheless, we must be fully prepared in the highly unlikely event of an oil spill.

We have prepared robust response strategies in close co-operation and consultation with state and federal agencies, who we will partner with for any nearshore activities.

NOPSEMA will assess our Environment Plan and we will only be allowed to start drilling once we have demonstrated we can do it safely and with thorough response plans.

Q13. Opponents of the plan cite oil spill modelling which shows that oil could spread all the way to NSW coast. Is this accurate?

Our oil spill maps do not represent what a single spill would look like, or the area it would affect.

To make sure we have planned for anything that could possibly happen, regardless of how unlikely it is, we are required to form a single map by superimposing 100 different simulations of a worst-case oil spill under varying weather conditions.

The modelling assumes that every piece of safety equipment on the rig fails, and nothing is done to stop the leak, contain or disperse the oil for a hundred days. In the unlikely event of an actual oil spill, we would respond immediately.

Q14. What commitment will Equinor make to invest in the communities it will be working in?

We really believe there could be oil in the Bight, and if there is, it could transform South Australia’s economy, just like what we’ve seen in Norway.

The fjords in Norway are still clean, our fisheries are thriving, tourism is booming, and we have created thousands of jobs and funded billions in public spending through taxes.

We hope to do the same for South Australia, and we have now presented an environment plan which documents the richness of the Bight, but also demonstrates we can operate there safely.

Q15. Will there be any more seismic testing?

The recent seismic testing in the Great Australian Bight is a completely independent project and not related to our plans.

Q16. How does the depth and ocean conditions of the Bight compare to other places mined by Equinor around the world?

Equinor is experienced in drilling in similar depths and ocean conditions.

The deepest we have drilled is in Canada, at a depth of 2828m (Cupids 2015), and there are several wells east of Canada beyond the Stromlo-1 water depth.

We will apply our expertise from the rough Norwegian seas, where have operated in stronger winds, higher waves and colder waters, for more than 45 years.

Q17. What associated onshore development would be needed and how would the oil be transported?

We are still in the exploration phase and first need to determine if there is a commercial oil or gas resource in the area.

If we do find oil, we will then take the necessary steps to prepare for commercial operations, which would include onshore development and supporting infrastructure.

The onshore development would be centred around a supply base (for goods), a helicopter base (mainly for people) and the onshore support organisation (office staff).

A likely development case would be a FPSO, which would not require a pipeline to shore.

Q18. What impact is envisaged the presence of oil rigs will have on the marine ecosystem (fish stocks through to migration of whales).

As part of our preparations, we helped to fund the Great Australian Bight Research Program, which found that most important areas for whales are closer to shore, but there may be individuals migrating through our operations area.

The research showed that pygmy blue whales may migrate through the area near our planned drill site, but the breeding, calving, foraging and migration areas important to other protected whales, dolphins, seals and sea lions are located closer to shore.

We also found that southern bluefin tuna may transit through the area, but studies showed they have low sensitivity to planned activities.

Q19. What guarantees can you make there won’t be an oil spill?

Equinor has drilled lots of wells around the world just like the one we plan for in the Great Australian Bight.

Our environment plan brings together 45 years of experience drilling in Norway’s rough seas, and proper safety measures for exploration in this region.

By the time we start drilling we will have spent more than two years planning this well, to satisfy ourselves that we operate safely and in accordance with Australia’s strict environmental and regulatory requirements.

Q20. How common is oil drilling around Australia?

Offshore drilling has a long history in Australia.

The first Australian offshore exploration permit was granted in Gippsland in 1959 and since then more than 3,800 wells have been drilled.

Today there are more than 400 petroleum titles in offshore Commonwealth waters including exploration permits, retention leases, production licences, pipeline licences and infrastructure licences.

Q21. Why in this day of renewables do we need to pursue oil drilling?

While Equinor is actively investing in both wind and solar energy technologies, every realistic energy scenario for the future still requires new investments in oil and gas to provide energy for a growing population.

We are working on reducing the carbon footprint from our oil and gas production and we think the Great Australian Bight could hold light, high-quality oil that aligns with this approach.