What’s worse than an oil rig leaking into the sea?

An endless fire on an oil rig, perhaps.  The West Atlas rig and the Montara wellhead platform operated Thailand’s PTT Exploration and Production burst into fire on Saturday, 10 weeks after it began spewing oil and gas into the sea. The fire can’t be extinguished as gas from the well is fuelling it, but PTTEP says it is preparing 4,000 barrels of heavy mud to pour down a relief well to try and kill the fire.

The leak is already looking like an environmental disaster – and the political fallout is also growing. Greens and the opposition are attacking the government, and controversy is building over the environmental reports carried out so far by the Australian government – with critics saying that surveys should have looked at the southern side of the rig instead of just focusing on the northern side, where the oil was thought to be billowing.

The West Australian government, meanwhile, is using the disaster to argue that the federal government should not take jurisdiction for offshore oil and gas.

As for the oil and gas industry, well, it doesn’t look good, analyst Peter Strachan told the ABC:

Mr Strachan says the events of the past 10 weeks have had a negative impact on the reputation of the entire oil and gas industry.

“Everyone is holding their heads in their hands and shaking. At the same time, the oil and gas industry’s operating in Australia for 40 or 50 years and there hasn’t been this sort of incident that I can remember in Australia,” he said.

The disaster has also a serious blow for the PTTEP, Thailand’s only listed oil and gas company. The company confirmed a few days ago that it has made a $177m provision because its insurance won’t cover the accident. Its shares were down on Monday in Bangkok and the rig itself is a write-off, according to operator Seadrill, and PTT itself says the rig may collapse.

Related links:

PTTEP says rig may collapse with fire out of control (Bloomberg)
Endless leak fuelling oil rig blaze
(ABC News, 01/11/09)

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