Pilot Energy collapse a ‘litany of regulatory failures’ impacting Australian investors and taxpayers
For immediate release: Thursday 16 July 2026
Pilot Energy collapse a ‘litany of regulatory failures’ impacting Australian investors and taxpayers
Company enters administration with est $200m clean-up liabilities outstanding
Pilot had received millions in government funds before collapse
Taxpayers facing decommissioning cost, which Pilot never recognised
LONDON – The voluntary administration of Pilot Energy has highlighted serious failures of federal regulators in Australia, experts have warned, with investors and taxpayers facing the biggest losses from the firm’s collapse.
The Australian Securities Exchange-listed company was suspended from quotation in April and entered voluntary administration this week, with an estimated AUD $200 million in outstanding clean-up costs for its Cliff Head assets off the Western Australia coast which it has been seeking to purchase from fellow minnow Triangle Energy.
The field’s total decommissioning liability is largely not reflected in the consolidated financial statements of either listed company, in a real disclosure gap that should concern the market.
Pilot’s administration raises serious questions for regulators, given the junior energy company had received millions in government funds, and reported minimal revenue. Pilot paid executives more than $1.5 million in salaries before its collapse.
After oil production at Cliff Head stopped in 2024, Pilot announced plans to convert it to carbon capture and storage (CCS) – which would preclude it from being a decommissioning liability – and received $6.5 million in CCS funds from the federal government.
After the CCS plan went unrealised, the company this year announced a slew of new projects, including data servers, solar power, battery storage, direct air capture and hydrogen and ammonia production – none of which have come to fruition.
The company also received a $3.9 million federal refund for decommissioning work, effectively keeping the company afloat. The bulk of the decommissioning work remains outstanding, and because of the low equity value of its JV partner Triangle, there is a real risk taxpayers could yet face the bill.
Redwater Insights is a data-driven research initiative analysing the risks associated with oil and gas decommissioning liabilities.
Redwater Insights Director of Legal Sophie Marjanac said:
“Pilot Energy’s administration represents a litany of regulatory failure in Australia, where investors and taxpayers are likely to be the biggest losers from its collapse.
“It’s failure of NOPSEMA (National Offshore Petroleum Safety and Environmental Management Authority) who should have ensured that financial assurance was held by companies representing such a high risk.
“It's a failure of financial disclosure that proposals for CCS at old oil infrastructure can mean that decommissioning liabilities vanish from the balance sheet. Now plans for CCS at Cliff Head appear to have gone up in smoke, the asset’s very real decommissioning liabilities are largely absent from consolidated financial statements of either company.
“And it’s a failure of the federal government’s approach to industry support, which included Pilot receiving millions in grants and refunds, while its future revenue relied on a slew of unrealised projects.”
To better protect Australian investors and taxpayers Redwater Insights recommends:
The federal government introduces strong financial assurance measures – such as pre-funded bonds or sinking funds – to ensure decommissioning funds are properly ringfenced while operators are profitable, to avoid any costs later falling to the taxpayer;
The government also rethinks its CCS subsidy scheme to ensure taxpayer funds are not going to industry projects so far proven unviable;
The oil and gas industry’s regulators ensure better scrutiny of licence transfers, particularly those that include late-life assets; and,
That the Australian Securities and Investments Commission (ASIC) follows through with its commitment in May to review the disclosures of companies that have decommissioning provisions, and investigate Pilot and Triangle’s disclosures relating to their decommissioning liabilities.
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