London-listed Petrofac has won a contract from the Australian government to complete the initial decommissioning phase of the Northern Endeavour floating production, storage and offloading vessel, which has been stranded offshore for three years.

The contract, awarded by the Federal Department of Industry, Science, Energy & Resources, has the potential to be worth up to A$325 million (US$236 million) to Petrofac.

The company has been designated as ‘outsourced operator’ and will be responsible for decommissioning and disconnection of the FPSO from its subsea equipment, and temporarily suspending the wells. Disconnection of the floater is expected to occur over approximately 18 months.

The Northern Endeavour is a 274-metre long FPSO moored between the Laminaria and Corallina oilfields, about 550 kilometres northwest of Darwin in the Timor Sea.

The FPSO has been stranded off the Australian coast since 2019 when operator Northern Oil & Gas Australia (Noga) went into administration, leaving the government to take over responsibility for the unit.

In addition to the phase one works of removing of the FPSO and disconnecting it from the subsea equipment, future decommissioning work will include the permanent plugging and abandonment of wells, as well as the removal of subsea infrastructure and remediation.

Josie Philips, Petrofac’s regional director, Australia, said: "This contract builds on 15 years of working in Australia and is further proof of our growing and long-term ambitions in the country.

“A critical element will be upskilling the local workforce to meet the challenges of billions of dollars of decommissioning work in Australia now and in the future.

“It is Petrofac’s aim to be a local company, growing local jobs, local skills and the local supply chain. I’m delighted that we have (companies) Monadelphous and Linch-pin already on board.”

Petrofac’s asset solutions business chief operating officer Nick Shorten claimed the company is the only tier one contractor with the in-house capability to manage all well and asset decommissioning phases.

Petrofac, together with its supply chain partners, including Monadelphous and Linch-pin, will ensure the safe and cost-effective removal of the FPSO from the field in accordance with good industry practice, the company said.

All activities will be undertaken in close consultation with Australia’s National Offshore Petroleum Safety & Environmental Management Authority (NOPSEMA) to make sure strict safety and environmental protections are in place.

Novel legislation

Australia’s federal parliament last August passed novel legislation to strengthen the nation’s offshore oil and gas regulatory framework.

Themeasures in the bill, which references decommissioning liabilities, were developed following extensive consultation with industry; and they adopt recommendations from the Walker Review, which looked into the circumstances leading to the liquidation of Noga.