A petroleum company’s attempts to offload stricken oil and gas infrastructure on an environmentally sensitive peninsula within the National Heritage-listed King Sound for a fraction of the value it was estimated to be worth should ring alarm bells for the WA Cook Government.

Environs Kimberley and Lock the Gate Alliance say the situation highlights the risks the fracking industry poses to the unique Kimberley region.

Deteriorated and inaccessible by vehicle: the causeway to the Point Torment well site. Photo: supplied.

Rey Resources is attempting to offload its Kimberley-based assets and 100%-owned subsidiary Gulliver Productions to an overseas company called China Guoxin Investment Holdings, after writing down the value of its assets from nearly $5 million to about $400,000. In response to this announcement, the ASX sent a series of questions to Rey probing the company's financial situation was sufficient to warrant its continued listing and expressing uncertainty over “the group’s ability to continue as a going concern.”

Documents obtained by Environs Kimberley under Freedom of Information reveal that in 2021, the three King Sound gas wells were a mess, with oil staining on the ground and wellhead corrosion, among 44 possible breaches departmental officials identified. It is unclear what, if any, remediation work Rey has undertaken since inspection. 

Environs Kimberley and Lock the Gate Alliance fears there is a significant risk that if Rey Resources successfully offloads its assets, they will be abandoned and the hefty rehabilitation bill will fall to the WA taxpayer, as has recently occurred with New Standard Energy and Advent Energy projects in the Kimberley. The stranding of these wells resulted in multi-million cleanup bills and potentially “profound” ecological damage.

Rey Resources' cleared drill pad at Point Torment. Photo: supplied.

Shortly before announcing this planned “disposal” deal to the ASX, Rey Resources also lodged a state petroleum exploration application to clear grid lines more than 3000 km long for seismic testing across a 5058 km2 tenement near Derby and south east of its existing wells in the Kimberley. Under current WA rules, these tenements are able to be fracked, should Rey apply to do so. This tenement is included in the proposed offload deal. 

Environs Kimberley recently wrote to the Foreign Investment Review Board, urging it to reject Rey’s attempts to offload its subsidiary and Kimberley assets. This followed letters to WA Mines and Petroleum Minister David Michael expressing concerns over the company's plans. 

Environs Kimberley Executive Director Martin Pritchard said, “It was a reckless decision to allow drilling for oil and gas in the mangrove lined flats of King Sound in the first place. The cost of cleaning up the mess left behind in this remote and sensitive location will run to millions of dollars.

“The Department of Mines and Petroleum has let the drill sites deteriorate to the point where one of them is now inaccessible by vehicle and they’ve had to chopper in staff to investigate. 

“The department seems to let these oil and gas companies get away with poor management without consequences. The Petroleum Minister David Michael needs to take charge of the situation to make sure taxpayers aren't footing the clean-up bill for another oil and gas company. 

“It’s really clear that fracking in these areas would be an absolute disaster when the government departments can’t manage three wells and make companies accountable for poor practices.”  

The Stokes Bay well site. Photo: supplied.

Lock the Gate WA Coordinator Claire McKinnon said, “No oil and gas company should ever have been given permission to drill in an area as environmentally significant as the National Heritage listed King Sound.

“Rey must be forced to fund the decommissioning and closure of all the wells on its tenements. The WA taxpayer must not be left to once again pick up the clean up bill for an oil and gas company.

“This concerning situation shows why it’s so important that the Cook Government ban fracking in the Kimberley. 

“The high cost of unconventional gas extraction means it’s likely that if a fracking company was able to get a project going in the Kimberley, it would result in the drilling of many hundreds if not thousands of wells. 

“This sorry situation shows the Cook Government is not up to the task of adequately regulating a mere three conventional wells, let alone thousands of frack wells”.

More than 23,000 petitions and postcards from voters calling for a ban on fracking in the Kimberley have been handed over to Premier Roger Cook and Minister Simone McGurk in Fremantle.

“The Kimberley is known for its world class landscapes, intact nature and ancient culture; to allow fracking here would be a disaster,” Environs Kimberley Executive Director Martin Pritchard said.

More than 23,000 voices, one clear message: ban fracking in the Kimberley.

“And Fremantle locals know it. It’s why they’ve been volunteering in droves to put up yard signs committing to vote for a candidate who will ban fracking, attending local events, and reaching out to their friends and neighbours asking them to join the momentum," he said.

“The only people who support fracking are the gas companies chasing bigger profits. Those who know about the toxic pollution and damaging production methods are completely opposed.

“This 23,000 signature petition is a powerful message to the Cook government and the Minister for Water, Simone McGurk that people want fracking banned in the Kimberley like it is in the southwest of Western Australia.”

Fremantle locals know fracking Kimberley would be disastrous.

Lock the Gate Alliance spokesperson Claire McKinnon said: “We’re ramping up the pressure of our community campaign – that's driven by hundreds of Freo locals – calling on Simone McGurk to ban fracking in the Kimberley in the leadup to the WA election.

“These 23,000 petitions, plus our door to door and community event surveys have revealed without a doubt that Fremantle constituents want their local MP Simone McGurk to ban fracking in the Kimberley – and they’re willing to switch their votes over it," she said.

“Fracking, which requires a toxic cocktail of dangerous chemicals and huge volumes of water, poses a major threat to the Kimberley’s communities and its unique environment.

“WA Labor was right to ban fracking across the south west of the state, but leaving the Kimberley at risk exposed a double standard. This must be fixed.” 

You can send a message asking Premier Cook to ban fracking in the Kimberley here. 

Photos: John Reed.