Oil Services Company to Pay $9.5 Million for False-Reporting

NEW ORLEANS (CN) – A company that services oil platforms in the Gulf of Mexico will pay $9.5 million in fines for falsifying safety inspection reports before and after a 2012 platform fire that killed three workers.

The U.S. Justice Department announced Thursday that Houston-based Wood Group PSN will pay $7 million for falsely reporting that safety inspections were performed on its Gulf of Mexico facilities over the course of several years.

Wood Group will pay another $1.8 million in fines for discharging oil into the Gulf of Mexico following a platform explosion in 2012 that killed three workers.

In addition, the company will pay $700,000 for community service projects.

The platform involved in the explosion, located 17 miles from Grand Isle, Louisiana, was owned by Black Elk Energy Offshore Operations LLC.

At the time of explosion, it was not producing any oil, but workers were on the platform preparing to go back into production.

Investigators later concluded a worker ignited oil vapors while welding on the morning of November 16, 2012, and that led to a chain reaction that caused oil tanks to explode.

Avelino Tajonera, Elroy Corporal, and Jerome Malagapo  were killed in the blast. Several other workers were seriously burned or otherwise injured.

According to federal documents, from April 2011 to July 2014, employees at Wood Group PSN’s Cameron, La., office failed to inspect and maintain facilities they were contracted to oversee in the Gulf of Mexico, and also falsely indicated that the facilities had been properly inspected and maintained.

Last April some of the most serious charges – manslaughter and criminal violations of the Clean Water Act – were thrown out by a federal judge in the Eastern District of Louisiana district court. The government has since appealed to the Fifth Circuit in a bid to have them reinstated.

In a news release issued Feb. 23, the  company admitted to 87 violations on offshore platforms.

Wood Group admitted its employees were negligent in the way they authorized welding to be done on West Delta 32, and that a lack of communication between personnel on the platform, including Wood Group PSN’s person-in-charge, Christopher Srubar, contributed to the events that caused oil to be discharged into the Gulf of Mexico in a harmful quantity.

“We deeply regret these incidents occurred and we cooperated fully with the government and relevant regulatory bodies throughout both investigations,” Wood Group said in an emailed statement.

“Developing domestic sources of energy is of vital importance to our nation.  This development must be done responsibly and safely to protect public health and the environment,” said Christopher Brooks, special agent in charge of the EPA’s criminal enforcement program in Louisiana, in a written statement. “This case is an example of federal law enforcement partners holding individuals accountable for their illegal conduct, and ensuring that the hard work invested in restoring the Gulf of Mexico is not jeopardized.”