Noble Drilling Fined $12.2 Million For 2012 Incidents

The conical drilling unit Kulluk sits aground on the southeast shore of Sitkalidak Island about 40 miles southwest of Kodiak City, Photo courtesy of the U.S. Coast Guard.
The conical drilling unit Kulluk sits aground on the southeast shore of Sitkalidak Island about 40 miles southwest of Kodiak City in 2012. )Photo courtesy of the U.S. Coast Guard)

The Alaska U.S. District Attorney’s Office announced Monday that a plea deal has been reached between the federal government and Noble Drilling for incidents involving the drill ship Noble Discoverer and drill barge Kulluk while under contract with Shell Oil during the 2012 arctic drilling season.

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As part of the agreement, Noble Drilling has agreed to plead guilty to eight felony offenses, and will pay $12.2 million in fines, which are a combination of criminal fines and community service payments.

The charges are a result of a U.S. Coast Guard investigation, following an inspection of the Noble Discoverer in Seward. During the investigation, the Coast Guard found a number of maintenance and record-keeping issues.

“For example, oil record book entries for the Noble Discoverer report that the oil water separator, or OWS, was used during periods of time when in fact the OWS was inoperable,” Yvonne Lamoureaux, an Assistant U.S. Attorney, said. “In addition, Noble failed to record that the OWS was inoperable and failed to record that its oil content meter, which is part of that required pollution prevention equipment was also non-functional.”

Lamoureaux also says Noble failed to log numerous transfers and storage of machinery space bilge water and waste oil.

Assistant U.S. Attorney Kevin Feldis addresses the media on Dec. 8, 2014. (Photo by Josh Edge, APRN - Anchorage)
Assistant U.S. Attorney Kevin Feldis addresses the media on Dec. 8, 2014. (Photo by Josh Edge, APRN – Anchorage)

Assistant U.S. Attorney Kevin Feldis says Noble will also be placed on corporate probation for four years.

“They will be under supervision from the United States Probation Office, and during the term of their probation, if they have any other violations of law, they could be subject to having probation revoked, which means that they could have additional fines imposed, charges that may not have been brought in this case could then be brought at a future time,” Feldis said.

Additionally, Noble Drilling will enter into an environmental compliance plan, which Feldis says is meant to ensure incidents of this nature don’t happen again.

“After the investigation began, Noble came to us and notified us of changes that were underway within Noble to, of course, remedy these criminal acts,” Feldis said. “And those have continued and the environmental compliance plan required under this agreement will build upon things that Noble has now been doing since this investigation started.”

In a written statement, Noble Drilling says it has already begun enhancing training programs and compliance policies, as well as mechanical and operational upgrades to the Noble Discoverer.

An independent auditor will review the plan and its implementation.