Furie reviews Jones Act settlement

Furie Operating Alaska LLC is asking a federal judge for more time to consider a long-delayed but recently approved settlement over a Jones Act violation and fine.

In a recent status report, the company asked the U.S. District Court for the District of Alaska for an additional 60 days to provide final closing papers or an updated status report. The company also asked for the schedule of a potential trial in the case to be pushed back 60 days, saying that the federal government had agreed to the request.

“Given the passage of time, and taking into account the change of administration, Furie desires additional time to evaluate the situation and assure that it is entering into a valid agreement that will not be subject to collateral attack or criticism from the new administration,” attorneys for the local independent wrote in a status report filed on Feb. 22. “Furthermore, the negotiated agreement is stale because the payment dates are no longer valid due to the government’s delay, and must be amended. Furie has an upcoming board meeting at which time the company advises final decisions will be made.”

In a response filed with the court on Feb. 23, U.S. Attorney Karen Loeffler with the U.S. Department of Justice wrote: “there is no basis to question the ‘validity’ of the settlement agreement, once finalized. A revised settlement agreement was provided to Plaintiff on February 3rd; it should not take an additional 60 days to agree to revised dates.”

The U.S. Department of Justice approved the settlement with Furie in early February, nearly seven months after the company and the U.S. Department of Homeland Security announced the tentative settlement in August 2016. The Justice Department later blamed the delay on lost paperwork associated with the case in late 2016 and early 2017.

U.S. Customs and Border Protection assessed a $15 million fine against the Furie predecessor Escopeta Oil Co. in October 2011, after the company brought the Spartan 151 jack-up rig to Alaska to explore the offshore Kitchen Lights unit. The federal agency accused the company of violating the Jones Act, which requires any vessel moving between domestic ports to be built, flagged, crewed and mostly owned by Americans.

The following summer, Furie sued the U.S. Department of Homeland Security, calling the fine “unwarranted and unprecedented.” The two sides later entered mediation.

- ERIC LIDJI