PTTEP Stopped Oil Spill, Blaze on Rig Off Australia (Update1)

Nov. 3 (Bloomberg) -- PTT Exploration & Production Pcl has plugged a well that has been leaking oil and gas off northwestern Australia for 10 weeks, and extinguished the main blaze engulfing a drilling rig.

Experts on board a nearby rig pumped about 3,400 barrels of heavy mud down a relief well to stop the leak, PTTEP said in an e-mailed statement. The main fire at the Montara well head platform has been put out, although some material on the rig may still be ablaze, the company said.

“PTTEP drilling experts who are monitoring online well data in Perth reported the situation was stable and well pressure was being maintained,” the statement said.

PTTEP, Thailand’s only publicly traded oil-exploration company, has estimated that up to 400 barrels of oil a day were seeping into the Timor Sea. WWF-Australia has called the oil spill an unfolding environmental disaster and has reported seeing dolphins, birds and sea turtles swimming in the oil slick.

Australia’s Resources and Energy Minister Martin Ferguson said the terms of reference for a commission of inquiry will be announced before the end of the week.

“It is vital that we understand what caused this incident, that we learn from it, and that we put in place any measures that would help prevent such an incident occurring in the future,” he said in an e-mailed statement.

PTTEP slumped to the lowest in more than three months, dropping 5.1 percent to 130 baht in Bangkok, adding to yesterday’s 5.5 percent slide.

Delay Project

A fire erupted on Nov. 1 as the Bangkok-based company injected mud into the well to try to halt the flow of oil and gas. The blaze at the West Atlas drilling rig was “out of control,” Jose Martins, a director of the company’s Australian unit, said yesterday. Losing the rig, which may collapse into the ocean, will delay the start of extracting an estimated 35,600 barrels of oil a day from the field.

A daily flow of 300-400 barrels of oil since the leak started Aug. 21 would make the spill the third-biggest in the nation’s history, based on figures from the Australian Maritime Safety Authority’s Web site. The company failed on three prior attempts to stem the flow.

PTTEP has said it will pay the maritime safety authority’s costs for cleaning up and controlling the spill. The company has set aside A$177 million ($160 million) as provisions against costs for the leak.

The world’s largest population of humpback whales, about 22,000, is found along the northwestern coast, according to a survey by whale researchers Richard Costin and Annabelle Sandes.

Tourism Australia describes the region as “one of the world’s last true wilderness areas.” Ashmore Reef, which supports sea snakes, dugongs and marine turtle nesting sites, was feared to be within reach of leaking oil in the spill’s early days.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.