Wood Group to pay $9.5 million in penalties for Gulf of Mexico violations

Two rig workers died after a fire broke out on a rig in the Gulf of Mexico.
By Daniel J. Graeber  |  Updated Feb. 24, 2017 at 2:42 PM
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Feb. 24 (UPI) -- Oilfield services company Wood Group agreed to pay $9.5 million in penalties for two separate cases related to violations in the Gulf of Mexico, including a deadly 2012 offshore platform fire, the Justice Department said.

"Developing domestic sources of energy is of vital importance to our nation," Christopher R. Brooks, special agent in charge of U.S. Environmental Protection Agency's criminal enforcement program in Louisiana, said in a statement. "This development must be done responsibly and safely to protect public health and the environment."

Two of the 24 rig workers on a platform operated by Black Elk Energy died in a late 2012 accident off the coast of Louisiana. The company said the incident occurred during a "construction project" and investigators said later that rig workers cut into a pipeline on the platform that had oil inside, sparking a blaze.

Court documents show Black Elk contracted with Wood Group to secure personnel to man operations at the West Delta 32 production platform in the Gulf of Mexico.

The platform was not in service at the time of the explosion and only minor sheen was reported after the incident. Black Elk determined that less than 1 barrel of oil spilled from the platform.

Black Elk and Grand Isle Shipyards, which assigned workers to perform the welding, face manslaughter charges in connection with the incident.

Black Elk is moving through Chapter 11 bankruptcy.

For that incident, Wood Group was ordered to pay $1.8 million for negligently discharging oil into the Gulf of Mexico in violation of the Clean Water Act.

The U.S. Justice Department also said Wood Group, in a plea agreement, admitted it failed to inspect and maintain the facilities appropriately, claimed falsely that environmental regulations were followed and had trouble in general keeping its inspection records in order.

"The office did not have sufficient labor and transportation, and the work was not always completed on time," the Justice Department stated. "The company admitted to 87 violations on offshore platforms."

In that case, the company was ordered to pay $7 million.

"We deeply regret these incidents occurred and we cooperated fully with the government and relevant regulatory bodies throughout both investigations," Wood Group said in a statement. "These agreements provide a clear outcome that will enable us to continue to focus on our Gulf of Mexico business and our ongoing commitment to providing our people with the training, tools and management support they need to work safely and with the utmost integrity."

CORRECTION: Updated to clarify the total penalties were the sum of two separate orders, and add a statement from Wood Group.

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