Offshore staff
NEW ORLEANS – Taylor Energy Co. has agreed to pay $475 million to settle litigation with the US federal government over the 17-year leak of crude oil in the Gulf of Mexico, according to NOLA.com and several other online sources.
The leak is reportedly the longest such release in American offshore oil and gas history, and emanated from the company’s hurricane-destroyed production platform in Mississippi Canyon block 20, some twenty miles off the mouth of the Mississippi River.
According to a proposed consent decree filed last Wednesday in US District Court in New Orleans, the company will transfer to the Interior Department a $432.5-million trust fund that it set up to pay for capping and plugging the 28 wells, decommissioning the remaining portions of the platform, and cleaning up any soils contaminated by the leak.
The company has also agreed to pay more than $43 million in civil penalties, federal costs for removing the platform and wells and expenses for restoring or replacing natural resources such as wildlife, fisheries, or wetlands contaminated by oil. The state of Louisiana is a co-trustee with the federal government in overseeing the money to restore natural resources.
The proposed settlement signals the end of Taylor Energy, a company founded in 1979 by Patrick Taylor, an independent oil executive. Taylor passed away in 2004, only a few weeks after Hurricane Ivan destroyed the platform in the Gulf of Mexico. In the ensuing years, his company sold its other oil and gas assets, retaining only the failed wells and the cleanup response trust fund.
The settlement, which is subject to public comment for 40 days, requires Taylor Energy to drop its lawsuits against the federal government, including a challenge to the US Coast Guard’s decision to install a spill containment system over the well site. The containment system collects oil that continues to leak from some unplugged wells.
It also requires the company to drop its challenge to the Coast Guard’s denial of Taylor’s request for $353 million, which would have been reimbursement for the company’s spending on fighting the leak and plugging the wells.
Further, the settlement resolves all federal claims on the company. And when Taylor Energy sells its remaining assets after the settlement, the proceeds will go to the federal government, according to the Justice Department. The company will be allowed to hold onto enough money to pay for operations until the liquidation is complete.
12/24/2021
