The regulatory landscape surrounding the decommissioning of oil and gas wells has intensified, with both well-containing leases now listed as pending cancellation. The regulator emphasizes the importance of decommissioning and rehabilitation before final cancellation to facilitate access arrangements. Rey Resources, which continues to operate these wells despite selling their subsidiary, has significantly diminished the perceived value of the wells—from nearly $5 million to only $400,000. Recent shareholder updates have failed to mention these assets, indicating a lack of clear future plans for their decommissioning. Instead of proposing tangible rehabilitation efforts, the company has only submitted plans for annual inspections and maintenance, following the government’s rejection of its earlier environmental proposals.
Environmental group Lock the Gate has raised serious concerns regarding the inaccuracies in Rey Resources’ newly filed plans. These documents overlook the 44 breaches identified by the regulator in 2021, which led to recent government directives. Instead, the plans reference outdated inspections and incorrect details about the condition of tanks and fences, with Lock the Gate asserting that many security measures noted were also not implemented. They point out that portions of the documents appear to be remnants of earlier submissions rather than current assessments, further undermining the credibility of Rey’s proposals for maintaining the sites.
In 2021, the estimated cost to close a single abandoned gas well was pegged at $1.5 million; however, given the potentially greater complexities of the current sites, Lock the Gate posits that the cleanup for the three wells could exceed $5 million. Meanwhile, Rey Resources is aiming to capitalize on other leases, specifically the Derby Block tenement, hoping to engage in seismic testing across extensive areas. Concerns have been raised by Lock the Gate about Rey’s capability and commitment to safely conduct such operations, especially in environmentally sensitive regions prone to extreme weather events. As a precautionary measure, the regulator is screening Rey’s new plan for the Derby Block.
Amidst the ongoing issues at the well sites, the WA government has placed the Derby Block tenement under a 12-month suspension, with a potential extension to be discussed in September 2024. Rey Resources has recently claimed they are reaching out to Native Title holders and landowners to facilitate land access for proposed seismic surveys. The future actions of the department regarding additional directives to other stakeholders, including China Guoxin and Gulliver Productions, remain uncertain. Given the previous environmental concerns, the situation puts additional pressure on stakeholders to address the lingering issues promptly.
Photographic evidence obtained under Freedom of Information laws exhibits the neglected state of the well sites, featuring corroded wellheads and an unsecured oil tank. Calls for accountability are coming from various groups, including Environs Kimberley, whose executive director has highlighted the need for Minister for Mines and Petroleum David Michael to step in before the situation escalates. Drawing parallels to past failures in managing abandoned assets, there is increasing pressure for clarity on how the public will be shielded from potential liabilities arising from these companies’ operations.
Critics, including Lock the Gate, argue that current legislation appears insufficient in holding oil and gas companies accountable for environmental remediation in the Kimberley region. Minister Michael has acknowledged the government’s commitment to the safe and responsible decommissioning of oil and gas infrastructure, noting that the complexities of ownership and operational histories require thorough due diligence. In March 2024, DEMIRS introduced new guidelines for the decommissioning of petroleum and geothermal assets across WA, emphasizing the state’s priority to ensure compliance and safeguard public interests amidst these contentious issues.
The ongoing difficulties reflect a larger pattern of industrial exploration in the Kimberley, where many believe that legislative frameworks may be failing to ensure that these companies take responsibility for their environmental footprint. As Rey Resources continues to navigate these challenges without a clear remediation plan for their abandoned wells, stakeholders are left questioning the future of both the affected sites and the regulatory processes designed to oversee them. Calls for immediate action and transparency in the decommissioning and rehabilitation processes have become more urgent as the region faces potential environmental degradation.
