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Exploring the Great Australian Bight:
Frequently asked questions

Are we really planning to use toxic dispersants? What is the truth about the oil spill map? And will the profits to the Norwegian Government really be 27 times the tax to the South Australian Government? Read the answers to these and other important issues.

Is this map true? And if not, what is wrong with it?

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Misleading map circulated online

 


Q: “Your own modelling map shows that the majority of our coastline is at risk from an oil spill. Is this map true?”

A: No, it isn’t.
This map has been circulated widely online, and is manipulated and grossly misleading. It misrepresents the risk and consequences of a major oil spill, and many people have been alarmed by it. This rendition is not our map. It is unfortunate that this misleading information has resulted in expressions of genuine fear and concern for some in the community. We call on all parties in this public discussion to hold themselves to a high standard of factual and balanced information. 

A: No, that is not correct. Regrettably, the report from the Australia Institute contains significant factual flaws. It was prepared without consultation with us and was presented to the media and reported on as though it were fact. Its conclusions are based on false assumptions.

The Norwegian government does not receive 67% of Equinor’s profits from international operations; nor is Equinor owned by the Norwegian Sovereign Wealth Fund. The Norwegian Ministry of Petroleum and Energy’s only income from Equinor’s international assets is a proportional share of the dividends. Not all profits are distributed to shareholders, but much is reinvested in the business. Furthermore, Norway’s 78% tax rate on domestic oil and gas production is offset by the opportunity to write off 78% of exploration costs, in a symmetric system intended to reduce economic risk for operator companies within Norway only.

Finally, if we do find oil in the Great Australian Bight, tax will be just one element of the value creation of the project — goods, services and jobs will also be key drivers for local value creation.

A: That claim is untrue. Let us explain. For Equinor, any oil spill is unacceptable. Our priority is to prevent any well control incidents through careful planning, but we must be fully prepared to respond to any situation. If we believed there was any chance that an oil spill could happen, we would not go ahead with this project. As part of our Environment Plan (EP), we have stated that in the unlikely event of an oil spill, we would use dispersants accepted on the Oil Spill Control Agent (OSCA) Register. Products with a high acute toxicity  or containing prohibited substances are not permitted.

All oil and gas companies operating in Australia are required to use dispersants which are pre-approved by Australian Maritime Safety Authority (AMSA) and selected from the OSCA Register. The AMSA Efficacy Test Protocol for the Register (AMSA 2012) lists the toxicity testing requirements that ensure products meet the requirements of acceptable practice for the National Plan for Maritime Environmental Emergencies (the National Plan).  

Dispersant application is a globally recognised and practiced response technique, recognised under the National Plan, and is considered the primary and most effective spill mitigation action in the event of a loss of well control leading to a Level 3 oil spill. The process to implement and assess the use of dispersants has been set out in our Oil Pollution Emergency Plan (OPEP), which adheres to the National Plan and is submitted to NOPSEMA for assessment and acceptance before drilling can commence. 

To ensure there is a plan for the cases where there are shortfalls in the supply chain, other dispersants with transitional acceptance could be considered. Any decision to use transitionally approved dispersants will be made in conjunction with government agency advisors (e.g. AMSA, NOPSEMA), who will be invited to participate in the Incident Management Team in the unlikely event of an oil spill.

For more information see Section 8 of our Environment Plan and fact sheet on dispersants.

A: Based on industry experience, we know that NOPSEMA accepts fewer than 10 % of plans on first submission. We have always expected to work through an iterative process of resubmission before NOPSEMA accepts our EP. 

The request for more information is a standard step in the assessment process. We took the necessary time to submit the additional information to NOPSEMA to progress the assessment process, which was paused to allow us time to provide more information. We want to emphasise this is part of the normal regulatory process.

A: Not at all. Planning for exploration activities demands detailed and careful work. Our EP is a 1500-page technical, scientific and evidence-based document.

We are committed to meeting all regulatory requirements to demonstrate that we can conduct this activity safely as we do in other parts of the world. We remain committed to the opportunity to explore the Great Australian Bight, which we consider to be a prospective asset in our global exploration portfolio.

About the public comment period

Q: How do I provide a comment about your draft environment plan?

A: In February 2019, we participated in a widely publicised, voluntary 30-day comment period, the first by any company in Australia. This period is now closed, and we wish to thank all those who submitted comments to our EP, and who thereby helped to enable further improvements in our plan. Our plan is now being assessed by NOPSEMA.

Q: What happened to the public comments?

A: NOPSEMA forwarded all public comments to Equinor for consideration. We reviewed all relevant feedback and compiled a report on how relevant public comments were considered, and formally submitted an updated Environment Plan to NOPSEMA for assessment in April.

Q: Why did only 13 of 30,000 comments lead to improvements?

A: We didn’t expect many changes as we had already engaged with the community for 2 years, and most issues raised had therefore already been captured in the EP.  We followed NOPSEMA's guidelines to determine which comments were relevant. Duplicate or blank entries, spam, threats, profanities, fundamental objections to the industry, petitions and questions all had to be disregarded. 1039 entries were considered by our experts, although not all led to changes in the EP.  

Q: Why do you plan to drill in the Great Australian Bight when many people think oil exploration in the area is too risky?

A: Equinor has drilled lots of wells around the world just like the one we plan for in the Great Australian Bight. Our environment plan brings together 45 years of experience drilling in Norway’s rough seas, and proper safety measures for exploration in this region. After two years of careful preparation, we have concluded we can explore the Bight safely.

Q: Is Equinor the first company to drill in the Great Australian Bight?

A: No. There have already been 13 exploration wells drilled in the Great Australian Bight, with the first ones dating back more than 40 years.

For more facts, figures and background information, see the Government of South Australia fact sheet on oil drilling, below.

Q: Why are you still looking for oil and gas when the world should be transitioning to renewable energy?

A: While we are investing in both wind and solar, every realistic energy scenario for the future still requires new investments in oil and gas to provide energy for a growing population. We are working on reducing the carbon footprint from our oil and gas production and we think the Great Australian Bight could hold light, high-quality oil that aligns with this approach.

Q: What is the risk of an oil spill?

A: Major oil spills are extremely rare. In approximately 59,000 offshore wells drilled around the world since 1980, there have been only two major oil spill incidents: the Macondo spill in the Gulf of Mexico in 2010 and the Montara spill in the Timor Sea in 2009. The likelihood of a major oil spill for Stromlo-1 is extremely low.

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A typical floating offshore exploration rig and supply vessel with a fishing vessel shown for size comparison. 

Q: Did Equinor really have 239 oil spills in 2018?

A: . At Equinor we believe any oil spill is unacceptable; we work hard to plan for safe operations and to prevent all accidents. We also aim to demonstrate leadership in transparent reporting.

Equinor openly reports on all incidents, accidents and near-misses to continuously improve our safety procedures and outcomes, and to share learnings across the industry.

We report all spills down to half a litre which can be at our refinery.

In our 50 year history, we have never had an oil spill from an exploration well and we drill 30 to 40 exploration wells every year.

Read more in our 2018 sustainability report, linked below.

Q: Isn’t the Great Australian Bight an important whale sanctuary?

A: As part of our preparations, we helped to fund the Great Australian Bight Research Program, which found that most important areas for whales are closer to shore, but there may be individuals migrating through our operations area.

Q: Why are you drilling in a Marine Park?

A: Oil drilling is permitted by Australian authorities in this part of the marine park which is zoned as "Multiple Use". We understand our responsibility to protect the environment, and our environment plan concludes we can conduct this activity safely.

Q: Will you compensate businesses if there’s an oil spill?

A: We developed a compensation scheme after some organisations told us they were concerned that our operations could threaten their financial interests. The scheme is available to anyone who suffers a financial loss as a result of a major spill from our operations. The scheme is designed to be fast, independent and transparent process.

About the capping stack

Q: Will there be a capping stack in place?

A: Our priority is to ensure that a capping stack is never needed, by preventing any well control incidents through careful planning. We will therefore install a 400-ton blowout preventer before we drill, which can shut in the well in minutes, which is a highly effective device for any loss of well control. In the extremely unlikely event of the blowout preventer failing, we will fly in a capping stack. By having a construction vessel onsite, we have reduced the response time to 15 days compared to typical 30-40 days.

Q: Why would it take 15 days to deploy a capping stack and why isn’t there a capping stack in Australia?

A: A capping stack is a specialised piece of equipment and there are a limited number of capping stacks and teams of people capable of deploying them. They are kept in readiness at a central hub with suitable storage and mobilisation facilities. At least two capping stacks are maintained and tested in Singapore for urgent deployment across the region. The capping stack would be airlifted to the location as fast as possible with its trained crew.

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A Blowout Preventer (BOP), left, shown next to a capping stack, to scale. We will install the 400-ton blowout preventer before we drill, and it will remain in place throughout the operation.