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Wood Group PSN slapped with US$9.5 million in fines

Written by  Friday, 24 February 2017 10:47

The US Department of Justice (DOJ) has charged Wood Group PSN with criminal conduct, ordering the company to pay US$9.5 million in fines for two separate incidents in the Gulf of Mexico, one of which led to three fatalities in 2012, leaving those involved to face manslaughter charges.   

Image of the response to the West Delta 32 platform fire in 2012. Image from the US Coast Guard.

According to the DOJ, Wood Group PSN was ordered to pay $7 million for falsely reporting over several years that personnel had performed safety inspections on offshore facilities in the Gulf of Mexico in the Western District of Louisiana.

A second fine of $1.8 million has also been given to the company for negligently discharging oil into the Gulf of Mexico in violation of the Clean Water Act after an explosion on an offshore facility in the Eastern District of Louisiana.

Wood Group PSN was also ordered to pay $700,000 in community service to projects in the areas where the criminal conduct took place.

“The events of November 2012 at West Delta 32 were tragic, and since then federal prosecutors have worked diligently to investigate and understand the full scope of criminal conduct,” said Acting Assistant Attorney General Jeff Wood of the DOJ’s Environment and Natural Resources Division. “Today’s plea agreement demonstrates the Department of Justice’s commitment to the integrity of federal safety programs and accountability for those who falsify federal safety inspection reports. In addition, the plea agreement ensures that Wood Group is held responsible for its wrongful pollution of the Gulf of Mexico, and it will bring community service projects to benefit the Gulf of Mexico and Gulf Coast communities.”

According to the factual basis of the company’s plea agreement in the false reporting case, from April of 2011 to July of 2014, employees at Wood Group PSN’s Cameron, La., office failed to inspect and maintain facilities they had contracts with on the Outer Continental Shelf’s Creole Loop, and also falsely indicated that the facilities had been properly inspected and maintained according to federal safety and environmental regulations. The company operators at the Cameron office had trouble keeping up with inspections and maintenance on facilities they serviced. The office did not have sufficient labor and transportation, and the work was not always completed on time. The employees, from operators to clerks, then falsified reports to the Bureau of Safety and Environmental Enforcement (BSEE). The company admitted to 87 violations on offshore platforms, the DOJ said.

Wood Group PSN’s Clean Water Act conviction stems from an explosion on Black Elk Energy Offshore Operations (BEE) offshore oil production facility at area West Delta 32 in the Gulf of Mexico. According to court documents, BEE had contracted with Wood Group PSN for individuals to man and conduct production operations at the West Delta 32 facility. Beginning on 3 November 2012 and continuing through 16 November 2012, construction was being conducted at the West Delta 32 facility. Wood Group PSN supported the construction by issuing hot work permits for welding.

However, the DOJ’s investigation reports that starting on or about 10 November 2012, the Wood Group PSN Person-in-Charge Christopher Srubar, stopped issuing hot work permits and conducting all-hands safety meetings, and instead delegated the hot work permitting to a less experienced operator. On 16 November 2012, Grand Isle Shipyards (GIS) construction superintendent, Curtis Dantin, assigned workers to perform welding in three different areas of the “E” platform, including sump line piping that had previously contained hydrocarbons but had not been made safe for hot work, or identified in a permit as an area safe for hot work. The sump line piping led to an oil storage tank that contained hydrocarbons contaminated with water, also known as the wet oil tank.

After the construction workers had cut and grinded the sump line piping the morning of 16 November they attempted to weld on the cut piping with an arc welder. At that time, hydrocarbon vapors that had escaped from the wet oil tank ignited. The ignition caused an explosion setting off a series of additional explosions in the three oil tanks on the “E” platform. One of the dry oil tanks and the wet oil tank were blown into the Gulf of Mexico. The other dry oil tank was blown off its base and destroyed the platform crane. Oil spilled into the Gulf of Mexico causing a sheen on the water. Oil rained down to the lower deck of the platform where workers had been performing other construction activity. The fire and explosions that occurred resulted in the deaths of construction workers, Avelino Tajonera, Elroy Corporal, and Jerome Malagapo. Other workers were seriously burned and physically injured.

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

Co-defendants, BEE and GIS face manslaughter charges, and Curtis Dantin, Christopher Srubar, and Don Moss face criminal violations of the Clean Water Act in the Eastern District of Louisiana before the Honorable Judge Jane Triche Milazzo, in case no. 15-cr-197 “H.” BEE also faces eight felony counts of regulatory violations under the Outer Continental Shelf Lands Act.

Charges against Moss, Srubar, Dantin, and GIS under the Outer Continental Shelf Lands Act that were dismissed by the district court are pending an interlocutory appeal by the government to the US Fifth Circuit Court of Appeals, case no. 16-30561.

Read more:

Black Elk, WGPSN charged in deadly 2012 rig explosion

Contractors blamed in Black Elk incident report

Black Elk death toll rises

Black Elk fire victim dies

1 dead, 1 missing after platform fire

2 missing after GOM platform fire

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