production summary, page-9

The fact that the Weatherford production equipment is capable of processing up to 16,000 barrels of water per day has been mentioned by other posters in previous threads. I have pasted the relevant passage and source below.

Water separation is fairly straight forward, the oil sits on top of the water and the water is drained or the oil is pumped off the top. So I'd assume the problem is with the water treatment. This also is not rocket science, but more involved than the separation. Virtually every oil rig has this processing equipment.

From the statement below it would appear they didn't expect water production in the early days. They were also only expecting 7-15,000 bopd. It would not surprise me that in order to fast track production, they commissioned the rig without this water treatment equipment being fully installed/operational, certainly it wasn't tested. They may have thought they could separate what little water was produced and tanker it to an onshore processing plant. This may have been why they wanted to test the water to see if it was formation water or introduced water. If it was introduced water, they would get away with storing & tankering. As we know it was formation water so they were caught short, a calculated gamble to fast track things, but no harm done.

Asx Release 24th Feb titled Major contracts awarded.....
"Whilst at the start of field life, the field is not expected to produce significant water volumes, in
preparation for later in field life, the processing system will be capable of treating up to
16,000 barrels of water (from a total 20,000 barrels of fluid) to stringent water quality
requirements. "

Another basic link
http://en.wikipedia.org/wiki/Oil_production_plant

It would be interesting to hear from some of the posters with technical knowledge (p1000, Ya & a few others) as to the ramifications (if any) of water in the early well life.