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Outer Continental Shelf Civil Penalties

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Minerals Management Service (MMS), Interior.


Notice summarizing Outer Continental Shelf Civil Penalties paid from January 1, 2006, through December 31, 2006.


This notice provides a listing of civil penalties paid from January 1, 2006, through December 31, 2006, for violations of the Outer Continental Shelf Lands Act (OCSLA). The goal of the MMS Outer Continental Shelf (OCS) Civil Penalties Program is to assure safe and clean operations in the OCS. Through the pursuit, assessment, and collection of civil penalties and referrals for the consideration of criminal penalties, the program is designed to encourage compliance with OCS statutes and regulations. The purpose of publishing the penalties summary is to provide information to the public on violations of special concern in OCS operations and to provide an additional incentive for safe and environmentally sound operations.

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Joanne McCammon, Program Coordinator, at 703-787-1292.

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The Oil Pollution Act of 1990 (OPA 90) strengthened section 24 of the OCSLA Amendments of 1978. Subtitle B of OPA 90, titled “Penalties,” increased the amount of the civil penalty from a maximum of $10,000 to a maximum of $20,000 per violation for each day of noncompliance. More importantly, in cases where a failure to comply with applicable regulations constitutes or constituted a threat of serious, irreparable, or immediate harm or damage to life (including fish and other aquatic life); property; any mineral deposit; or the marine, coastal, or human environment; OPA 90 provided the Secretary of the Interior (Secretary) with the authority to assess a civil penalty without regard to the requirement of expiration of a period of time allowed for corrective action.

The provisions of OPA 90 also require the Secretary to adjust the maximum civil penalty to reflect any increases in the Consumer Price Index. Every 3 years, MMS analyzes the civil penalty maximum amount in conjunction with the CPI prepared by the U.S. Department of Labor. If an adjustment is necessary, MMS informs the public through the Federal Register of the new maximum amount. The MMS has published regulations adjusting the civil penalty assessment to $25,000 on August 8, 1997 (62 FR 42668), and to $30,000 on November 28, 2003 (68 FR 61622).

Between August 18, 1990, and January 2007, MMS initiated 583 civil penalty reviews. Operators have paid 459 civil penalties for a total of $15,370,792 in fines.

On September 1, 1997, the Associate Director for Offshore Minerals Management issued a notice informing lessees and operators of Federal oil, gas, and sulphur leases in the OCS that MMS will annually publish a summary of OCS civil penalties paid. The annual summary will highlight the identity of the party, the regulation violated, and the amount paid. The following table provides a listing of the 41 penalties paid between January 1, 2006, and December 31, 2006. The total amount collected was $1,480,000. A quarterly update of the list is posted on MMS's home page,​civilpenalties/​CP_​2006.HTM.

2006 Civil/Criminal Penalties Summary; All Penalties Paid in Calendar 2006


Operator name (contractor) and case No.Violation and date(s)Penalty paid and date paidRegulation(s) violated (30 CFR)
The Houston Exploration Company (Grasso Production Management)Failed to conduct one annual crane inspection$10,000 8/25/06§ 250.108.
PetroQuest Energy, LLC (Wood Group Production Services)Missing grating & handrails, corroded unsafe steps, and severe corrosion around the fuel scrubber created an unsafe situation for personnel. Also, the flowline and departing pipeline did not have secondary over-pressure protection$60,000 1/3/06§ 250.802(b), § 250.107.
El Paso Production Oil and Gas CompanyExplosion and fire occurred on platform from welding and cutting operations near hydrocarbons$25,000 2/7/06§ 250.107
Exxon Mobil CorporationThe Pressure Safety Low (PSL) for Well G-24 had the incorrect spring and piston installed; the spring tension was backed off to a point where it would not function. This violation occurred for 11 days$25,000 6/8/06§ 250.803(b)(2)(i).
Apache Corporation (Wood Group Production Services)During an annual inspection, the inspector discovered that the Emergency Shut Down (ESD) stations for both the North and South boat landings were out-of-service$28,000 3/10/06§ 250.803.
Noble Energy, Inc (Hercules Offshore Drilling)The gas detector panel that monitors the mud pit room and shale shaker area was found to be in bypass during a monthly rig inspection. The operator forgot to put it back in service after calibrating the sensors. When the panel was taken out of bypass and tested, the audible alarm failed to activate$160,000 2/15/06§ 250.459(b).
Energy Partners LtdThe level safety high (LSH) shut-in sensor for the deck drain sump tank was bypassed at the main panel. Neither the LSH nor the operating condition of the sump tank were being monitored by platform personnel$8,000 1/10/06§ 250.803(c).
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El Paso Production Oil and Gas Company (Baker Energy, Inc.)Shut down valve connected in such a way that it would not operate as designed; pressure would not bleed off if an upset had occurred$10,000 8/7/06§ 250.802(b).
Apache Corporation (Wood Group Production Services)Grating missing on the plus 10 deck level in two areas and area not barricaded to prevent personnel from entering$66,000 2/9/06§ 250.107.
Apache Corporation (Wood Group Production Services)During a production follow-up inspection on February 20, 2005, wells A002 and A003 Surface Safety Valves (SSVs) were pinned out of service in the open position, and the wells were not flagged or monitored$24,000 3/13/06§ 250.803(c).
ATP Oil & Gas Corporation (Wood Group Production Services)The vertical run Surface Safety Valve (SSV) for Well C-2 was bypassed and locked out of service with a locking cap$21,000 6/22/06§ 250.803(c).
Millennium Offshore Group, Inc (TODCO)Unsafe and un-workmanlike operations were conducted in that the policies and procedures for Confined Space Entry were not being adhered to as per Operator's Health, Safety and Environment manual$10,000 7/27/06§ 250.107.
Noble EnergyDuring an inspection on May 2, 2005, the top and bottom isolation valves on the Level Safety Low (LSL) for the Bad Oil Tank (ABJ-5020) were found blocked out of service and not flagged or being monitored$8,000 3/24/06§ 250.803(c).
Apache CorporationApache failed to comply with the safe and workmanlike manner and well control requirements addressed in the regulations. A remote blowout preventer (BOP) station on the rig floor would not operate nor function the bottom pipe ram and the hydraulic (HCR) choke valve. An accumulation of hydraulic oil on derrick beams and board rack, oily and slippery hand rail, and no grating over mud pits demonstrated Apache's failure to maintain all equipment in a safe condition$28,000 5/11/06§ 250.107, § 250.615(c).
Pioneer Natural Resources USA, IncOperations were not performed in a safe manner as Personnel attempted to replace a 2” ball valve on the water dump bypass line on the Chem-Electric Treater without draining the vessel. This created an uncontrolled oil release from the vessel over the structure's open grating, and into the containment skid which was damaged and unable to contain the oil. As a result, approximately 1 barrel of oil polluted the Gulf$45,000 5/10/06§ 250.300(b), § 250.300(a), § 250.107(a).
SPN Resources, LLCThe sump system could not automatically maintain the oil at a level sufficient to prevent discharge of oil into offshore waters$10,000 6/13/06§ 250.300(b).
ATP Oil & Gas CorporationThe Level Safety Low (LSL) on the water section of the Heater Treater was bypassed and blocked out of service. Startup, maintenance, or testing procedures were not being performed; personnel were not monitoring the bypassed and blocked out functions; and the LSL was not flagged$5,000 6/27/06§ 250.803(c).
Petroquest Energy, LLC (Grasso Production Management)The Gas Detector Head (ASH) in the operator's tool room was found covered with plastic wrap, which rendered it inoperable. Paint fumes were activating the ASH and plastic bags were placed over it to prevent nuisance shut-ins and to keep the fumes from contaminating the sensor$20,000 6/8/06§ 250.803(c).
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Apache CorporationAn employee was injured since work had been performed in an unsafe and un-workmanlike manner. On 10-3-05, in order to access a well slot, 33” openings were cut in the grating on the well deck and on the lower production deck. The two holes cut in the decking were never barricaded, covered, guarded, or made inaccessible until 10-5-05, after the employee fell 8′ through the unguarded hole cut in the well deck and into the opening cut on the lower production deck. He was able to catch himself before falling completely through the second opening into the cross members and well slot guide 40′ below.$70,000 5/16/06§ 250.107.
Noble Energy, IncWhile enroute to another destination, the Minerals Management Service (MMS) Inspectors noticed a multi-colored sheen on the water coming from the ST 196 Platform B. They landed on the platform and found oil flowing out of the vent hatch on the Sump Tank ABH-4760. The MMS Inspectors also found the Sump System did not automatically maintain the oil level sufficiently enough to prevent discharge of oil into offshore waters$50,000 7/13/06§ 250.300(a), § 250.300(b).
Kerr-McGee Oil & Gas CorporationThree safety devices were found bypassed at the panel—the level safety low for the wet/dry oil tank, the shut down valve for the dry oil pump, and the shut down valve for the incoming pipeline. Proposed amount mitigated from information supplied in letter$15,000 7/19/06§ 250.1004, § 250.803.
ATP Oil & Gas CorporationAn injury occurred as a result of unsafe and un-workmanlike operations. A contract worker fell 30' through an unsecured access hatch. Additionally, large openings in the deck were found and sections of heliport skirting were missing$110,000 12/29/06§ 250.107.
Union Oil Company of CaliforniaA pollution incident occurred as a result of improperly isolating the turbine compressor from the production train$25,000 7/25/06§ 250.300(a).
Tana Exploration Company, LLCThe primary and secondary surface safety valves (SSV), in addition to the fuel gas were bypassed on Caisson Well No. 28. The relays were placed in bypass by BP Exploration and Production employees (acting as contractors for Tana) on February 14, 2005. When an upset occurred on February 19, 2005, on the upstream processing platform, the Well No. 28 did not shut in due to these safety devices being bypassed. The pipeline experienced overpressure and the flange gasket ruptured allowing gas/condensate to escape. The Well was shut in using the boat landing emergency shut down pull loop$165,000 8/31/06§ 250.803(c), § 250.803(c).
Energy Partners, LtdThe pressure safety low (PSL) on the departing high-pressure transfer gas pipeline (KAH-103) was by-passed at the master panel, leaving the pipeline unprotected from a leak or rupture. The relay was not flagged and conditions were not being monitored$10,000 6/22/06§ 250.1004.
Arena Offshore, LLC (Island Operators Co., Inc.)Pollution occurred in offshore waters from overflow of vessel to deck caused from a pipeline being tested which was using FSVs instead of block valves. This overflow went to the deck containment system and the deck drain sump system tank was inoperable$27,000 8/25/06§ 250.300(b), § 250.300(a).
Callon Petroleum Operating CompanyThe fuel gas supply for the sump pump was manually closed, placing the sump pump in an out of service mode. Neither the sump pump nor the sump tank where being monitored by platform personnel$5,000 5/11/06§ 250.300(b).
Forest Oil Corporation (Production Management Industries, LLC)Operations were not performed in a safe and workmanlike manner, and equipment had not been maintained in a safe condition. Pollution occurred since a fuel tank was filled beyond capacity and the sump system had not been properly maintained$45,000 9/6/06§ 250.107, § 250.107, § 250.300(a).
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Palace Operating Company (Island Operators Co.)During an annual inspection, the MMS inspector detected that the Surface Safety Valve (SSV) on well #2 was locked open using a fusible SSV stem cap rendering the valve inoperable or by-passed. This valve would not close had an undesirable event occurred (under pressure or overpressure of the flowline)$5,000 10/27/06§ 250.803(c).
Total E&P USA, IncThe Emergency Shut Down Valves were bypassed on both boat landings. The two PSVs on the Intermediate Production Separator were found closed thus taking them out of service (bypassed)$130,000 6/16/06§ 250.803, § 250.803.
Northstar Gulfsands, LLC (Offshore Contract Services LLC)The level safety low (LSL) on the atmospheric bad oil tank was manually closed placing it in bypass$15,000 9/6/06§ 250.803.
Nippon Oil Exploration U.S.AThe Platform's two primary means of escape had not been adequately maintained. Personnel on the platform had no safe means of egress due to missing grating and handrails$30,000 9/28/06§ 250.107.
Chevron U.S.A. IncPlatform's emergency equipment had not been adequately maintained. The winch and lower flange kit on the south capsule was severely corroded and unsafe for use$30,000 10/30/06§ 250.107(a)(2).
ATP Oil & Gas CorporationThe level controller which starts the sump pump was improperly set, therefore rendering the sump pump incapable of maintaining the oil in the sump tank at a safe level to prevent discharge into the gulf waters$12,000 9/22/06§ 250.300(b).
ATP Oil & Gas Corporation (Wood Group Production Services)The Emergency Shut Down (ESD) Stations on the condensate accumulator deck, sump deck, well bay area, and boat landing were all rendered out of service since the ESD supply line was disconnected$20,000 9/22/06§ 250.803(c).
Marathon Oil CompanyThe Temperature Sensing Element for the +10 deck drain Sump Pump was bypassed$40,000 11/9/06§ 250.803.
BP America Production CompanyOperations were not performed in a safe and workmanlike manner. While making an assessment of the unsafe conditions on the platform that needed repairing, the construction crew did not barricade a 3′4″ x 3′4″ opening in the stairway landing. Later, one of the crew members was injured when he fell through the open hole, approximately 20′ and into the Gulf of Mexico$25,000 10/25/06§ 250.107(a)(1).
GOM Shelf LLC (Crown Oilfield Services, Inc.)While attempting to secure and barricade hurricane related damages on the sub-cellar deck, a contract employee was seriously injured since the work was not performed in a safe and workmanlike manner. He was not wearing fall protection while he was in the direct vicinity of open holes in the deck grating, and he fell approximately 25-30 feet through a 3′ x 3′ opening onto the +10 deck$30,000 10/6/06§ 250.107(a).
Pioneer Natural Resources USA, IncThe main safety panel was bypassed during testing. In order to test any safety device on this panel, they all had to be placed in bypass. When the panel was in total bypass, the supply to the indicators was removed not allowing them to trip when an abnormal condition became present, thus there was no way for personnel to monitor the bypassed devices$20,000 12/13/06§ 250.803(c).
Venoco, IncDuring well recompletion operations, an accident occurred, which resulted in a loss of well control (blowout), and a 3 gallon oil spill. An investigation revealed removal of a lockdown pin from the well head during the alignment of the split tube hanger had circumvented the blowout preventer system$30,000 4/27/06§ 250.300(a), § 250.107(a).
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Nuevo Energy CompanyOn February 16, 2004, a transformer on a variable speed drive (VSD) unit over-heated and caught fire. A Minerals Management Service (MMS) investigation of the incident determined the fire, which was confined to the motor control center room, was due to the following causes: The electrical overload protection on the VSD had been placed in a non-functional mode. High amperage from a downhole electric submersible pump caused transformer to overload on the VSD, which subsequently overheated. Melting metal from the transformer dripped into a pan of threading oil below the transformer. A cotton glove that was laying in the pan of threading oil ignited. The resultant fire was extinguished by platform personnel investigating the source of smoke from the motor control center$8,000 2/8/06§ 250.107, § 250.803(c)(1).
P-2004-0022/16/04-2/16/04 3/31/04-3/31/04
Total Penalties Paid: 1/1/2006-12/31/2006, 41 Cases: ($1,480,000)

The purpose of publishing the penalties summary is to provide information to the public on violations of special concern in OCS operations and to provide an additional incentive for safe and environmentally sound operations.

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Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701.

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Dated: January 30, 2007.

Gregory J. Gould,

Acting Associate Director for Offshore Minerals Management.

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[FR Doc. E7-4876 Filed 3-16-07; 8:45 am]