“Disappointing and frustrating”: Jadestone again shuts in troubled FPSO offshore Australia - Upstream Online
“Disappointing and frustrating”: Jadestone again shuts in troubled FPSO offshore Australia | Upstream Online
Singapore-headquartered independent Jadestone Energy yet again has been forced to shut in the floating production, storage and offloading vessel deployed on its Montara oilfield offshore Australia and to suspend production at the asset.
Jadestone on Monday confirmed that on 29 July, a gas alarm was triggered within ballast water tank 4S, “indicating possible communication with one of the adjacent tanks within the FPSO”.
Production from the Montara fields has been temporarily shut in and key stakeholders, including Australian regulator the National Offshore Petroleum Safety & Environmental Management Authority (Nopsema), were notified of the incident.
Tank 4S will be emptied and cleaned over the next week to allow an inspection to identify the source of the communication between tanks and allow for appropriate repairs.
Following the inspection, Jadestone said it would issue a further update outlining next steps, any potential costs and any impact to production guidance.
“While disappointing and frustrating to have to shut in Montara again, we will find and repair any additional defect while continuing with the overall planned programme of inspection of the storage tanks on the FPSO,” said Jadestone chief executive, Paul Blakeley.
“The safety of our personnel, as well as the long-term integrity of the asset, are paramount. We will provide a further update once the inspection of tank 4S is complete.”
As of 30 June, Jadestone had a net cash position of US$7.1 million while the company’s US$35 million standby working capital facility remains undrawn.
Only a day before the gas alarm was triggered on the Montara Venture FPSO, Panmure Gordon analyst Ashley Kelty in a note commented on Jadestone’s first half 2023 trading update, which showed a year-on-year decline in production — due a previous longer than expected shutdown at Montara.
Jadestone’s revenues for the first half 2023 revenues had slumped to less than half of the comparable period last year, with the company’s management warning of a net loss for the six months ended 30 June 2023.
Referring to Jadestone’s first half 2023 trading update, Kelty on 28 June said that investors would likely have been relived that there were “no more material surprises” over the operator’s financing position and commented on the “stronger current production levels”, thanks to Montara’s production being restarted.
“However, the recent balance sheet issues have shaken investor confidence and it is imperative that management deliver a period of stability with growing production…to lift sentiment,” he said last Friday.
The Montara Venture FPSO had previously restarted operations on 21 March 2023 after being shut in for seven months following an earlier oil leak and faults that needed rectifying.
Before the FPSO being taken out of action again on Saturday, Jadestone’s overall production was around 16,000 barrels of oil equivalent per day and its 2023 financial guidance had remained unchanged at between 13,500 and 17,000 boepd.
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