This article was first published in Australian Energy Daily © Peter Milne.

Administrator KPMG has recommended the companies behind the troubled Northern Endeavour oil production vessel be wound up, in a move likely to leave the Commonwealth Government exposed to a A$100 million + bill to make the oil fields safe.

Northern Oil & Gas Australia (NOGA) and two associated companies went into voluntary  administration in September. They ceased production in July when the offshore safety regulator NOPSEMA demanded a suite of maintenance issues be fixed after two dangerous accidents. The companies had already lost a total of US$104 million in the three years to December 2018.

The failure will put a sharp focus on the Commonwealth’s overdue review of offshore oil and gas decommissioning and ExxonMobil’s wish to sell out of its ageing Bass Strait operations.

In the UK decommissioning costs are only borne by the government as a last resort. If the owner of a facility offshore the UK cannot pay for decommissioning the liability first falls to the previous owners.

Woodside Energy, that sold the Northern Endeavour to NOGA, does not face that liability under Australian law.

Castleton Commodities Merchant Asia, that claims to…