The regulator has now listed both the well-containing leases as pending cancellation, and said it prefers sites to be decommissioned and rehabilitated before cancellation takes place, because this facilitates access arrangements.
Rey Resources, which sold the subsidiary and wells but remains their operator, has no apparent use for them and ascribes little value to them; before the sale it wrote down their value from nearly $5 million to $400,000 and its latest shareholder update gives no mention of them in its text or tenements map.
But rather than plan decommissioning or rehabilitation, after the government knocked back its last environmental plans for the sites, Rey Resources lodged two fresh plans for only annual inspections and maintenance.
Environmental group Lock the Gate says they also contain multiple inaccuracies; they do not reference or address the 44 breaches the regulator identified in 2021 that gave rise to the recent government directions notice, instead referencing a nearly decade-old inspection.
They also refer to tanks and fences that Lock the Gate says no longer exist on the sites, and security measures Lock the Gate says were also not executed. Lock the Gate also says they contain passages that are obvious remnants of older documents.
DEMIRS has estimated the cost to close an abandoned gas well at $1.5 million but that was in 2021 and an easier location, leading Lock the Gate to estimate that the clean-up for these three wells could exceed $5 million given their greater number.
Operator Rey Resources hopes to strike it rich from its other leases, including the huge Derby Block tenement covering King Sound and the land adjacent to the wells.
Shortly before announcing the China Guoxin deal, Rey applied to clear more than 3000 kilometres of grid lines across Derby Block for seismic testing, prompting fears from Lock the Gate that it lacked either the serious intention or capabilities to safely carry out such work in this high-value location, which is also subject to floods, extreme tides and cyclones.
The applications then disappeared and in March, Rey lodged a new plan for Derby Block, which the regulator says it is “screening”.
The WA government has also listed the Derby Block tenement as under 12-month suspension with an extension application lodged in September 2024 for a second year.
Rey Resources recently advised investors it was “actively contacting with Native Title holders and landowners for the land access for the proposed 3D Seismic survey” and “working with consultant [sic] for the update of [Derby Block’s] seismic environmental plan.”
It remains unclear whether the department intends to issue further directions notices to China Guoxin/Gulliver Productions regarding the two other wells.
Photographs released under FOI laws reveal an open tank of oil, left, and corroded wellheads, right.
Rey Resources did not respond to a request for comment. Attempts to contact China Guoxin Investment Holdings were unsuccessful.
Environs Kimberley executive director Martin Pritchard said Minister for Mines and Petroleum David Michael needed to take charge before this evolved into a “Northern Endeavour” situation, referring to the ageing disused oil vessel Woodside sold to an inexperienced company that failed and left the federal government with an enormous clean-up bill.
“We’re calling on Minister Michael to explain how taxpayers will not become liable,” Pritchard said.
Piping, black plastic poking through the ground and a pair of thongs were among the waste left around the sites. Credit: DEMIRS
“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 the mess.”
Lock the Gate says the government should permanently remove these tenements, which could represent the beginning of an extensive fracking industry in the region.
Minister Michael said the safe, timely and responsible decommissioning of oil and gas infrastructure was a government priority.
He said the complexity of ownership and operational history at particular sites often required thorough due diligence to resolve liability, which DEMIRS prioritised to ensure compliance.
In March 2024, he said, DEMIRS released a new guideline outlining the requirements for decommissioning of petroleum and geothermal energy assets, including wells, in WA’s onshore areas and state coastal waters.
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