Energy levy looms after liquidation

Australian energy companies face an industry-wide levy to cover oil and gas field abandonment costs.

Australian energy companies face the prospect of an industry-wide levy to cover oil and gas field abandonment costs after the operator of the Northern Endeavour production ship in the offshore Timor Sea was liquidated.

It’s understood a levy is more likely than taxpayers footing a bill, which could exceed $200m following the collapse of Northern Oil and Gas Australia on February 7.

The oil and gas junior owned the Northern Endeavour production ship which was permanently moored between the Laminaria and Corallina oil fields in the western Timor Sea.

However, in July last year the national safety regulator ordered a halt to production after finding structural defects that could cause multiple fatalities.

The federal government on Friday set up a program to fund the running and maintenance of the Northern Endeavour with plans to hire an operator in the next few days.

“It is essential that we ensure the protection of the environment around the Laminaria Corallina project in the Timor Sea and maintain the world recognised reputation of our oil and gas industry, as well as the effectiveness of our independent regulators,” Resources Minister Keith Pitt said.

“This event is a wake-up call to the Australian oil and gas industry. Australia requires new oil and gas discoveries to meet our export commitments, to deliver energy security and safeguard Australian jobs and Australian industries.”

Gas giant Woodside Petroleum previously owned the project before selling the facility to NOGA in July 2015.