The Industry department has brought in a handful of consultants from global giant Deloitte to help manage the removal of an ageing oil vessel floating on the Timor Sea and repair the damage, paying the contractors the equivalent of more than $360,000 each over the next year.
Under the latest contract for the project, Deloitte will provide the equivalent 3.5 contractors over the next year to work in the Industry department’s dedicated Northern Endeavour Decommissioning Project Management Office.
Deloitte picks up from fellow consulting giant KPMG, which has been paid $2.66 million for a little over a year’s work with the office.
The Northern Endeavour is a 274-metre former oil production vessel connected to the Corallina oilfields about 550 kilometres north-west of Darwin. Its former owners went into liquidation in 2019, leaving responsibility of the facility and its decommissioning to the Australian government.
The Industry department established the Northern Endeavour Project Management Office to assist with the long-term handling strategy for the Northern Endeavour decommissioning Program.
The main contract for the decommissioning went to Petrofac Facilities in April, netting the UK-based multinational $357 million over four years.
Several other consultants – both local and global — have been engaged for the planning work, which will also include filling the oil well left and remediating the environment. A temporary industry levy will be used to recover the costs, which could eventually stretch into the billions.
A spokesperson for Industry said Deloitte contractors will provide capabilities not available within the department.
“Decommissioning is a developing area in Australia, both dangerous and high risk for the environment. The department therefore required specialist capability outside its remit to manage this,” the spokesperson told InnovationAus.com.
The spokesperson said the $1.29 million contract with consulting giant represents 3.5 Deloitte contractors over the next year, the equivalent of nearly $369,000 each.
The department had previously engaged KPMG for the work under a contract it signed in May last year, which eventually tripled in value to $2.66 million. The increase included an $800,000 increase in value through an amendment just six weeks before the contract ended. Deloitte then won its contract for the work through a competitive tender process.
Oil and gas giant Woodside sold the Northern Endeavour facility to Northern Oil & Gas Australia (NOGA) in 2016. Rival companies have criticised the sale to the smaller company that couldn’t afford to decommission it. Woodside has denied it sold its majority interest in the Laminaria-Corallina oil fields, including the facility, to NOGA to avoid the costs of decommissioning the facility and rehabilitating the environment.
Parliament passed legislation in April to impose a temporary levy on industry to recover the costs of decommissioning and remediating the oilfields and associated infrastructure to ensure taxpayers aren’t left with the bill.
