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A recent inspection found the FPSO was in such a bad condition that NOPSEMA warned a gas leak or "release of hydrocarbons" could catch fire, risking multiple lives.
Late yesterday NOPSEMA published a prohibition notice ordering service provider Upstream Production Solutions and FPSO operator Northern Oil - a subsidiary of Timor Sea Oil and Gas Australia - to halt all production, and immediately cease all operations.
NOPSEMA noted it had ordered the shutdown due to an "immediate threat to health or safety" after Upstream Production Solutions had failed to "adequately identify and rectify structural corrosion" at the facility.
According to a regulatory inspection, the FPSO was in a "degraded state" and there were major concerns over the technical integrity of critical structures and equipment.
The vessel is permanently moored between the Laminaria and Corallina oil fields in the Timor Sea. The double-hulled vessel is designed to store 1.4 million barrels of oil and historically has processed 170,000 barrels of oil per day.
Energy News understands the FPSO was currently producing at under 5,000 bopd.
Specifically, a NOPSEMA inspector noted that an oil spill or gas leak could lead to subsequent ignition causing major injuries to workers or even multiple fatalities.
"I am satisfied that it is reasonably necessary to issue a prohibition notice to the operator of the Northern Endeavour - NOGA facility in order to remove the threat," a NOPSEMA inspector said.
"NOPEMA has identified structural defects due to corrosion at the facility, which could lead to a structural failure under design load conditions (eg weight, wind or fire)."
The regulator was alerted to the condition of the FPSO at the start of the month, when it was notified that an object had fallen from the vessel which could have killed a worker.
"We will work with Upstream PS as Operator, and NOPSEMA, to fully understand the regulator's concerns and take the appropriate actions to resolve any issues," a Northern Oil spokesperson told Energy News this morning.
According to information provided to Energy News from NOPSEMA, Upstream Production Solutions has 24 - 48 hours to shut down the facility.
Failure to comply with a prohibition notice can result in prosecution and financial penalty of up to $126,000 for failure to comply with the notice, plus $12,600 for each additional day the notice is not complied with.
This is not the first NOPSEMA notice to be issued to Northern Oil over safety and environmental concerns at its production vessel.
Three months ago the authority issued an improvement notice to the company for failure to meet its environmental plan obligations.
Last April the NOPSEMA inspectors said they had "reasonable grounds" to believe there was a "significant threat to the environment" because NOGA had allowed emergency spill contracts to expire and did not have the capacity to coordinate and manage an oil spill in its initial stages or combat and monitor a spill as described in its environmental plan.
Earlier in mid-2016, shortly after Northern Oil acquired the Laminaria and Corallina oil fields, the oiler was slapped with a notice for having an inadequate capability and capacity to respond to an oil spill.
The company took over the field and FPSO from Woodside Petroleum in that year.
The maritime boundary change, still to be ratified by the Australian parliament, will not affect the fields, which will remain in Commonwealth Australian waters.
Upstream Productions Solutions said it is not providing comments to the media.
Energy News will update on this story when more information becomes available.
