Energy Resource Technology GOM (ERT) was sentenced last week to three years of probation and a multi-million dollar fine for violating safety and environmental regulations.
The U.S. Attorney’s Office for the Eastern District of Louisiana said on April 6 that ERT, a subsidiary of Houston-based Talos Energy, was sentenced to three years of probation and ordered to pay a $4 million fine and $200,000 community service payment.
ERT pleaded guilty to two felony counts of violating the Outer Continental Shelf Lands Act and two felony counts of violating the Clean Water Act related to conduct on its offshore oil production facilities in the Gulf of Mexico.
During the period of probation, ERT, its subsidiaries, agents and affiliated business entity Talos Energy Offshore and its employees will be required to comply with a Safety and Environmental Compliance Plan.
The U.S. Attorney’s Office said ERT “knowingly and willfully” failed to comply with hot work regulations at its offshore production platform known as Ship Shoal 225 in late November 2012.
Contractors for ERT were found to have violated Title 30, Code of Federal Regulation, Section 250.113(c)(4), that mandates that hot work on offshore facilities should not take place within 10 feet of a well bay unless production in that area is shut-in.
ERT was also accused of “knowingly and willfully” failing to comply with the regulations for blowout preventer testing and of violating the Clean Water Act by tampering with the method of collecting the monthly overboard produced water discharge samples to be tested for oil and grease content.
According to the U.S. Attorney’s Office, ERT began suspecting that contract operators were “manipulating the integrity of the overboard produced water samples” at some of its platforms in Spring 2014.
Discharge monitoring reports showed no violations but when ERT began an investigation the company found multiple platforms to be in violation of their monthly discharge allowances.
ERT self-reported its findings to the government.
In a statement, Talos Energy, who acquired ERT in 2013, confirmed that the company self-reported the violations after an internal audit.
From April 2014 through June 2014, discharge monitoring samples that were correctly taken by ERT showed multiple Gulf of Mexico platforms, including High Island 557A, South Marsh Island 107A, Ship Shoal 225, Ship Shoal 224A, East Cameron 346A, Eugene Island 302C, South Timbalier 63A, Vermilion 331A and 171A, to be discharging oil and grease in excess of their permitted monthly allowance, the Attorney’s Office said.
ERT’s most recent Clean Water Act violation occurred in early June 2015 after two contract operators at the company’s Vermilion 195A released well bore fluid mixed with hydrocarbons into the water while they were bleeding pressure from the production casing on a plugged well.
In a statement given to Petro Global News, Talos Energy said it has instituted changes since its acquisition of ERT including conducting an independent third-party audit of all of its health, safety and environment (HSE) processes and compliance culture as well increasing training and leadership programs for field personnel.
The company has also added a senior level HSE executive who reports directly to the company’s CEO and board.
“Talos has a zero-tolerance policy regarding regulatory non-compliance. We are committed to getting this exactly right. This settlement allows us to resolve these legacy issues and move our organization forward with the high standards of HS&E culture and practice expected by Talos management,” Talos said.
The case was investigated by the Department of Interior-Office of Inspector General (Energy Investigations Unit) with assistance from the Investigations and Review Unit, Bureau of Safety and Environmental Enforcement and the Environmental Protection Agency-Criminal Investigation Division.