Commonwealth to foot bill for maintenance, safety of abandoned WA oil platform

Taxpayers will foot the immediate bill to keep an abandoned oil rig off Western Australia's Midwest coast in a safe condition.

The Cliff Head oil platform has sat mothballed since the collapse of owners Pilot Energy and Triangle Energy in July, leaving locals in Dongara, 350 kilometres north of Perth, worried about the potential impact on crayfishing grounds nearby.

Describing the rig as mothballed and neglected, local fishermen have demanded clarity on who would oversee the decommissioning of the rig and surrounding pipelines.

In a ministerial instrument signed last week, Federal Resources Minister Madeleine King authorised taxpayer funding to stabilise the rig, with her office maintaining all costs to government would be recovered.

A spokesperson said it would be unacceptable to do nothing while waiting for the insolvency process to be completed.

"The Government is stepping up to protect the environment because parts of the gas industry have failed to plan for the decommissioning of older facilities," the statement said.

"This is unacceptable.

"And so we are taking action. All costs of government will be recovered and the taxpayer will not foot the bill."

Who pays?

It is not the first time the government has been forced to step in.

Australian law requires the removal of all property and infrastructure when offshore oil and gas operations have ended.

In 2020 it took responsibility for decommissioning and re-mediating the Northern Endeavour, a deteriorating oil production vessel 550 kilometres off Darwin, after its owner went into liquidation.

The work is ongoing, with costs running into the hundreds of millions.

Government says it is recouping those costs through a levy on offshore petroleum producers.

Warning for the future

Conservation Council executive director Matt Roberts said the government's intervention at Cliff Head was another liability that should be borne by individual energy companies.

"We shouldn't be in a situation where yet again we are seeing taxpayer money committed to cleaning up failed industry when it comes to our offshore decommissioning," he said.

"This pattern is something we should be acting on right now so that we don't see this repeated into the future.

"We are looking at the next 50 to 60 years being major decommissioning of a lot of projects off the coast of Western Australia."

Oil and gas decommissioning has been estimated to cost $60 billion over the next 30 to 50 years.

While Ms King's office declined to say how much would be spent maintaining Cliff Head, a 2025 government backed report estimated decommissioning Cliff Head would cost $200 million. 

Mr Roberts said the costs should be made public, and stricter obligations should be placed on oil and gas companies to finance decommissioning.

"There needs to be transparency around this," he said.

"This is not an exception, this is a warning of what the future holds."