$12.2 million fineNoble pleads guilty to crimes relating to the operation of drill ships for Shell Alan Bailey Petroleum News
Having pled guilty to eight felony offenses relating to the operation of the Noble Discover and Kulluk drilling vessels in Alaska waters in 2012, Noble Drilling (U.S.) LLC will pay $12.2 million in fines and community service payments, the U.S. Department of Justice announced on Dec. 8 following a plea agreement with the company. In addition to the fines, Noble will be placed on probation for four years and will implement a worldwide environmental management system for all of its mobile offshore drilling units, the Department of Justice said.
Noble, a London-based drilling company, had been operating the two drilling vessels as part of a Shell Arctic offshore exploration drilling project. Noble owns the Noble Discoverer and operated the vessel in the Chukchi Sea under contract to Shell; Noble operated the Shell-owned Kulluk in the Beaufort Sea. Subsequent to the 2012 drilling season the Kulluk ran aground in the Gulf of Alaska while being towed from Dutch Harbor to Seattle.
False record keeping While operating the Noble Discoverer and the Kulluk in 2012 Noble knowingly made false entries in the vessels’ official records, the Department of Justice said. Specifically, the company recorded that it had used an oil/water separator to treat water discharged into the ocean, at times when the separator had been inoperable, the agency said. Noble also failed to log numerous transfers and storage of machinery-space bilge water and waste oil, and failed to log that a bilge water oil content meter and alarm on the Noble Discoverer was non-functional.
In addition, Noble modified the oil water separator on the Noble Discoverer without notifying a ship classification society or the U.S. Coast Guard, and without obtaining an international oil pollution prevention certificate for the modifications.
Bilge and wastewater Problems with managing bilge water and wastewater in the Noble Discoverer’s engine room caused Noble to rig up a makeshift barrel and pump system to discharge this water directly overboard, without processing the water through legally mandated pollution prevention equipment, the Department of Justice said. And, not only did the company fail to tell the Coast Guard about this arrangement, but the company also took steps to hide the fact that the system had been used, the agency said.
Noble admits to the negligent discharge of machinery-space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. Apparently, while the vessel was at anchor a bilge holding tank overflowed, creating a sheen on the sea surface.
The Department of Justice also noted that Noble had pumped oily fluids into the Noble Discoverer’s ballast tanks, despite the fact that these tanks are only supposed to hold uncontaminated sea water. Subsequently, rather than transferring the contaminated water to an onshore facility, or processing the water through an oil separator, the company simply discharged water from the tanks overboard. And the company failed to log its actions, the Department of Justice said.
The agency also said that Noble had operated the Noble Discoverer, despite “numerous problems” with the vessel’s propulsion system that may have compromised the vessel’s safety. Problems with the main engine and its propeller shaft caused engine shutdowns; equipment failures and unsafe conditions, including high levels of exhaust in the engine room; multiple fuel and oil leaks; and engine backfires. Under federal statutes, Noble should have reported these problems to the Coast Guard, the Department of Justice said.
Shell response In response to the Department of Justice’s statement, Shell expressed its regret at the issues surrounding the drilling vessels involved in the company’s 2012 Arctic drilling.
“We were disappointed to learn these events had taken place in 2012, but as the (plea) agreement confirms, Noble took immediate steps to investigate the incidents and enhance its training and compliance programs,” said Shell spokeswoman Megan Baldino in a Dec. 8 email. “While Noble has worked to resolve all of the issues and has appropriately accepted responsibility, we’ve made clear that their actions in 2012 are not acceptable.”
Baldino said that since 2012 the Noble Discoverer has undergone extensive repairs and upgrades, with all of the issues raised in the criminal indictment addressed. Both Shell and Noble have initiated procedural and safety management reviews that will be verified through internal and external audits and through operational testing, she said. Shell hopes to continue drilling in the Chukchi Sea in the summer of 2015, using the Noble Discoverer and another drilling vessel.
In March 2013 the Department of the Interior issued a report, triggered by the Kulluk grounding, criticizing Shell’s supervision of its contractors and requiring the company to submit a comprehensive integrated plan before resuming its Arctic offshore exploration.
Noble comments Noble has commented that concerns raised by the violations that occurred in 2012 have been addressed by the recent renovation and modernization of the Noble Discoverer and that, in addition, Noble has “strengthened its training programs to ensure that its operations more aptly reflect the company's deep commitment to safety, compliance and environmental protection.”
Environmental organizations, on the other hand, have commented that the Department of Justice announcement validates safety concerns relating to Shell’s Arctic offshore exploration program.
“This settlement simply confirms that Shell Oil and its contractors are not prepared for the challenges of working in Alaska’s Arctic Ocean,” said Susan Murray, Oceana’s deputy vice president, Pacific. “The Arctic’s unforgiving conditions leave little to no margin for error.”
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