Community groups say the Cook Government must take urgent action to protect WA taxpayers from a multimillion dollar cleanup bill for stricken petroleum infrastructure within a heritage-listed Kimberley bay, after the responsible company was sold off for a fraction of its original value.
For years, community groups have called on the WA Government to force Rey Resources to clean up its polluted and corroding petroleum well infrastructure on the shores of King Sound, part of the National Heritage listed West Kimberley National Heritage Place.
Photos of the degraded and partially inaccessible wells are available here.
Rey Resources’ latest quarterly update (see page two) confirms that a $400,000 deal to “dispose” of subsidiary Gulliver Productions, which owned three petroleum tenements that included the stricken wells in and adjacent to King Sound, has been finalised.
Rey’s December 2024 quarterly report suggested there were yet to be met conditions (Page 3) as part of the deal to sell Gulliver to little-known overseas company China Guoxin Investment Holdings. Gulliver Productions was once valued at $4.8 million.
Documents obtained from the WA Mines and Petroleum department by Environs Kimberley through freedom of information laws revealed that in 2021, the three King Sound gas wells were corroding, there was oil staining on the ground, and a blow-out preventer was incorrectly positioned. The department identified 44 possible breaches in total, however it is unclear what, if any, remediation work has occurred since inspection. The 2021 inspection report recommended issuing seven “directions notices” to Gulliver Productions, which were not issued at the time for unexplained reasons.
Media reports this morning that the department recently issued one “directions notice” requiring the company to conduct cleanup works.
Groups working to protect the Kimberley are now calling on the government to take much stronger action to protect the WA taxpayer, and King Sound itself.
Environs Kimberley Executive Director Martin Pritchard said, “The Minister for Mines and Petroleum David Michael needs to take charge of this before we get into a ‘Northern Endeavour’ type situation. His department has allowed an obscure overseas company to take over petroleum leases for $400,000 that have potential clean-up liabilities of millions of dollars.
“We’re calling on Minister Michael to explain how taxpayers will not become liable for the clean-up costs. His department has already said that taxpayer liabilities for onshore oil and gas well clean-ups at two abandoned sites in the Kimberley amount to $2.9 million which is a significant underestimate in our view. See background.
“Oil and gas companies appear to have free rein in the Kimberley to undertake exploration but it looks like existing legislation is failing to ensure that industry cleans up its mess. Millions of dollars of public funds are being spent on cleaning up the damage done by onshore oil and gas companies. Minister Michael needs to take charge here and stop this waste of taxpayer funds.”
Lock the Gate Alliance WA spokesperson Simone van Hattem said, “West Australians don’t want to see oil and gas companies destroy the majestic Kimberley.
“Right now, fossil fuels including fracking threaten the Kimberley, but this is a really good opportunity for the Cook Government to begin righting the wrongs that put this iconic region at risk.
“With the stroke of a pen, the Cook Government could make sure the threat of oil and gas in the heritage-listed King Sound environment is removed forever. It could make sure oil and gas never again threatens the water, land, and communities in this part of the Kimberley. It could be an important first step to banning fracking in the Kimberley altogether.
“The Cook Government should permanently remove these tenements. They never should have been approved in King Sound region in the first place.”
ENDS
Background: A $1.5 million estimate for the ex-New Standard Energy well in the southern Kimberley was made in 2021 (source here) and $1.4 million for the Vienta-1 and Waggon Creek-1 wells near Kununurra (See page 44 ) Given the three wells that are now owned by Guoxin are located in a sensitive and relatively inaccessible coastal environment, it’s logical to assume rehabilitation costs will be much greater.