Buru Energy has confirmed it will suspend operations at its Ungani joint venture oilfield after discussions with Main Roads WA.
Buru Energy has confirmed it will suspend operations at its Ungani joint venture oilfield after discussions with Main Roads WA.
Buru, the operator of Ungani – held in a 50:50 joint venture with Chinese-owned Roc Oil – has relied on a dual lane causeway in the Kimberley to transport output from Ungani to a storage facility at Wyndham since the Fitzroy River Bridge was damaged by ex-Tropical Cyclone Ellie earlier this year.
That causeway will be removed as soon as October, and a replacement barge installed for wet season while work to deliver a new, permanent Fitzroy River bridge continues.
But following a review into the project, Buru said the replacement barge would not suit the safe and reliable transport of oil across the Fitzroy River.
The company will suspend operations at Ungani following the next crude oil lifting later this month.
Buru will terminate key contact arrangements associated with trucking and storage of crude oil from Ungani, as well as employment contracts, in a bid to reduce its fixed and monthly operating costs at the project.
“The decision to recommend the suspension of operations to the Ungani Joint Venture following the next oil lifting later this month is a risk mitigation measure against what we consider as foreseeable longer-term interruptions to the Ungani crude oil road transportation route at Fitzroy Crossing during the upcoming wet season,” chief executive Thomas Nador said.
The company remains committed to the region, which is also home to its flagship Rafael discovery.
“Buru has a proud history of production operations in the Kimberley and looks forward to maintaining a strong presence in the region as it progresses the development of its flagship Rafael conventional gas and condensate discovery for the benefit of the region,” Mr Nador said.
Buru outlined a strategy for the staged development of Rafael earlier this month.
It said it would keep the market informed on its longer-term plans for Ungani following approval of an amended project management plan by the Department of Mines Industry Regulation and Safety.
The Fitzroy River Bridge sustained significant damage from the weather events in the Kimberley earlier this year, with Transport Minister Rita Saffioti referencing the project’s progress in question time yesterday.
She said the old bridge had now been fully demolished, with new piers constructed in the riverbed and a new deck soon to be built.
The new bridge is expected to be up and running mid-2024.
Buru shares were trading down more than 4 per cent at 11am AWST.
