Clough loses contract at oil spill field

The company behind an oil spill in the Timor Sea has terminated a contract with a construction firm to complete offshore facilities at the field where oil leaked for 10 weeks.

Clough Ltd announced to the Australian Stock Exchange on Thursday that Thai-based company PTTEP had terminated a contract with Clough.

A well at PTTEP Australasia's Montara oilfield began leaking on August 21 and was finally plugged on Tuesday.

On Sunday a fire broke out at the nearby West Atlas rig, operated by PTTEP as experts attempted to plug the well with heavy mud.

Clough said PTTEP terminated a contract for the installation of the balance of the offshore facilities at the Montara field as "a result of events over the last few days".

"The drill rig, the West Atlas and the wellhead platform topsides, installed by Clough's Java Constructor on August 7, have suffered significant damage in the fire," Clough said in the statement.

"Since the incident on August 21, the Java Constructor has been on standby, latterly in Singapore and the contract will now be closed out in accordance with the termination provisions."

Clough chief executive officer John Smith said the incident had been a "very unfortunate episode" for the industry but he was relieved to see the well under control.

"We have offered our services to both PTTEP and Seadrill to assist with the remedial work and will continue to work constructively for the best possible outcome," Mr Smith said.

Federal Resources Minister Martin Ferguson on Thursday announced an inquiry into the spill.

PTTEP said it had conducted a close-in helicopter flight around the Montara well head platform and West Atlas rig on Thursday to better assess the damage caused by the fire.

The company said a team on the Nor Captain vessel were progressing plans to reboard the platform next week.

"This afternoon's flight allowed them to gather more visual data to help progress that planning," PTTEP said.

A safety assessment for the reboarding operation is in train and PTTEP said it was working with the National Offshore Petroleum Safety Authority to obtain the necessary approvals needed to reboard the offshore facility.

"Once aboard the well head platform, the team will conduct detailed assessments and safety preparations to determine how the next phase to plug and fully secure the H1 well will be carried out following the damage caused by the fire," PTTEP said.

Thermal imaging technology has shown the main fire damaged area on the oil rig and platform has cooled down to ambient air temperature.