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Oil company facing $15M fine for rig transport from Texas

Posted: October 25, 2011 - 12:06am

ANCHORAGE — An oil company that is conducting exploration drilling in Cook Inlet is facing a large fine in connection with the move this summer of a jack-up rig from Texas to Alaska.

Escopeta Oil Co. has been fined $15 million by the U.S. Customs and Border Protection, KTUU-TV reported Monday.

According to the agency, the Houston-based company violated the Jones Act by transporting the jack-up rig from Texas to Cook Inlet using a foreign-flagged vessel. The Jones Act requires cargoes moved between U.S. ports to be in American-built and operated vessels even if the voyage is broken with a stop at a foreign port, as occurred with the move of the jack-up rig in August.

Escopeta used a Chinese heavy-lift vessel to move the jack-up rig, referred to as Blake 151, part of the way to Alaska. The rig was moved from the Gulf Coast to Vancouver, B.C., with the Chinese vessel, where it was offloaded to allow work to be done on the rig. The subsequent tow from British Columbia to Alaska’s Cook Inlet was done with U.S.-built tugs supplied by Foss Maritime, a U.S. company.

Escopeta sought unsuccessfully to get a waiver of the Jones Act because it said no U.S.-built vessel was available at the time to safely move the jack-up rig around the tip of South America.

The movement of the jack-up rig resulted in letters of complaint being written to U.S. Department of Homeland Security Secretary Janet Napolitano by several U.S. senators as well as U.S. shipping groups.

Alaska’s state oil and gas director, Bill Barron, also chastised the company for moving the Blake 151 into location in upper Cook Inlet and lowering the legs on the jack-up rig to the ocean bottom without completing sea bottom site surveys required by the state.

Steve Sutherlin, Escopeta’s spokesman, said that the company has 60 days to appeal the fine under the customs regulations. He said the fine is substantial for the mid-sized oil company but will not affect drilling operations in Cook Inlet.

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