Shell contractor faces $12.2M in environmental crime fines
The drilling operator of Shell’s ill-fated drill rig that ran aground south of Kodiak Island will plead guilty to eight felony offenses and has agreed to pay $12.2 million in fines and community service payments stemming from environmental and safety violations aboard its vessels, the U.S. Department of Justice said Monday.
Alaska Dispatch News article published 8 Dec 2014
The drilling operator of Shell’s ill-fated drill rig that ran aground south of Kodiak Island will plead guilty to eight felony offenses and has agreed to pay $12.2 million in fines and community service payments stemming from environmental and safety violations aboard its vessels, the U.S. Department of Justice said Monday.
Noble Drilling LLC, operator of the drill ship Noble Discoverer and drilling operator of the Kulluk — which broke free from a tow during bad weather and ran aground on Dec. 31, 2012 — also will receive four years of probation and must implement a Comprehensive Environmental Compliance plan for violating federal environmental and maritime law in 2012, according to a release from Karen Loeffler, U.S. Attorney for Alaska.
REUTERS: Noble in $12.2 mln settlement with DOJ over Alaska drilling: 9 December 2014
Dec 8 (Reuters) – Drilling contractor Noble Corporation PLC on Monday said it paid $12.2 million to settle felony charges by the U.S. Department of Justice related to safety, environmental and record keeping violations on vessels in Arctic waters off Alaska in 2012.
During 2012, the Noble Discoverer drillship experienced numerous problems with its main propulsion system, including its main engine, resulting in engine shut-downs, equipment failures, and unsafe conditions, according to prosecutors.
Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard, according to DOJ.
The Noble Discoverer was contracted by Royal Dutch Shell PLC to work on Shell leases in the remote Chukchi Sea off northwestern Alaska.
Charges also relate to Noble’s operation of the Shell-owned drilling unit Kulluk, which ran aground in December 2012 after work in the Beaufort Sea. Noble failed to keep proper records on both vessels, prosecutors said.
Under the terms of the plea agreement, Noble will plead guilty to eight felony offenses, pay $8.2 million in fines and $4 million in community service payments.
The London-based company is also required to implement a comprehensive environmental compliance plan, and will be placed on probation for four years.
A spokesman for Noble said the company has made significant improvements to the Noble Discoverer since it entered the shipyard in 2013.
(Reporting by Anna Driver; Editing by Marguerita Choy)
RELAED
Alaska Native News: Noble Pleads Guilty to Multiple Felony Violations During Shell’s 2012 Drill Season
According to the press release issued on Monday:
“Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.”
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Shell’s Simon Henry says its not difficult to drill in the Arctic Seas: 31 October 2014
Drilling in Alaskan Arctic relatively easy said Shell VP before being fired: 18 November 2014
Royal Dutch Shell BP Plc
What’s next for Royal Dutch Shell? Is a multi-billion merger with BP just around the corner?
Article byAlessandro Pasetti published by The Motley Fool 8 Dec 2014
What’s next for Royal Dutch Shell? Is a multi-billion merger with BP just around the corner? Takeover rumours in the oil industry often emerge when oil prices weaken, and this time is no different. A Shell/BP tie-up would have to be financed by Shell equity, and is unclear why BP shareholders would want to hold Shell stock right now, unless a big premium were offered. Regulatory hurdles won’t be easy to overcome, which heightens execution risk. If Shell risks a multi-billion takeover, its shareholders could be the ultimate losers at a time margins are strained, the cost of extracting oil and gas is on its way up, and a few projects are pushed back or cancelled.
RELATED
“BP Is A Strong Buy, But Not Because of Takeover Speculation”
Seeking Alpha article by Bob Ciura: Published 8 Dec 2014:
It’s true that if a company were to launch a takeover bid for BP, the time is right for such a move. BP is now just a $122 billion company by market capitalization. This is a far cry from where BP used to be; BP was a $225 billion company by market value as recently as 2008. Since the 2010 oil spill, BP sold off a great deal of assets in an attempt to raise the necessary funds to cover the $43 billion in spill-related expenses taken so far. To compensate for this, BP has divested $38 billion of assets already and plans to offload an additional $10 billion in assets by the end of next year.
However, future liabilities associated with BP’s ongoing civil trial are yet to be determined, and this uncertainty is precisely why it’s extremely unlikely Royal Dutch Shell will attempt a takeover. BP could face as much as $18 billion in additional penalties if it is hit with the maximum penalties possible due to a violation of the Clean Water Act. It’s hard to imagine Royal Dutch Shell buying out BP with this lingering uncertainty.
Shell’s Return to Iran?
Iranian officials have said that Royal Dutch Shell, British Petroleum, France’s Total and Russia’s Lukoil had expressed interest in investing in Iran when the sanctions imposed on Tehran over its nuclear program are eased.
MOSCOW, December 8 (Sputnik) — Iran will offer foreign investors new oil contracts amounting to $40 billion at an international conference in London to be held in 2015, the deputy director for combined planning at the National Iranian Oil Company (NIOC) said Monday.
What’s New: Shell Blames Thieves for Recent Oil Spills in Nigeria
In November, Amnesty International released court documents that it said showed Shell knew its pipeline at Bodo was shoddy. Shell denies the claim.
Article by Chris Steinpublished by The Voice of America: 08 December 2014
ACCRA, GHANA—A recent oil spill in Nigeria sent about 3,800 barrels gushing out of a pipeline and into the swamps of the oil-producing Niger Delta. Royal Dutch Shell, whose Nigerian subsidiary manages the ruptured pipeline, says the spill was caused by oil theft, which is a chronic problem for oil producers in Nigeria.
Local communities blame Shell for some of the spills that have fouled the Delta. The people of Bodo, a community that suffered two spills in 2008, are suing the company in a London court. In November, Amnesty International released court documents that it said showed Shell knew its pipeline at Bodo was shoddy. Shell denies the claim.
False Advertising Class Action Against Shell Oil
The United States District Court for the District of Oregon recently denied a motion to dismiss a putative nationwide class action brought against Shell Oil for alleged breach of contract, false advertising and an array of state consumer protection allegations.
Article by David O. Klein of Klein Moynihan Turco LLP published by mondaq: 8 December 2014
False Advertising Class Action Against Shell Oil Fueled By Federal Court
The United States District Court for the District of Oregon recently denied a motion to dismiss a putative nationwide class action brought against Shell Oil for alleged breach of contract, false advertising and an array of state consumer protection allegations.
In the action captioned Kearney v. Equilon Enterprises, LLC d/b/a Shell Oil Products US, 14CV254, Shell Oil moved to dismiss the putative class action complaint. While the court dismissed several state law statutory claims, the court refused to dismiss plaintiffs’ nationwide breach of contract claim.
The Shell Oil Advertisement: A Contract with Consumers?
Specifically, the advertisement at issue in the action was part of Shell’s “Ski Free” promotion and, according to Plaintiffs, promised: “Buy 10 gallons of fuel, get a voucher for a free lift ticket.” In reality, once Plaintiffs purchased ten gallons of fuel, they received a “two for one” coupon that allowed applicable consumers the right to obtain a free lift ticket only after purchasing a lift ticket at full price at a participating ski resort.
The only advertisement that the Plaintiffs saw was a sign promising a free ski lift ticket if they purchased ten gallons of fuel. The Court held that the “clear offer in the advertisement established a unilateral contract, and Plaintiffs accepted the offer through performance by purchasing ten gallons of fuel at a Shell station participating in the ‘Ski Free’ promotion.” From the clear language of the advertisement, the Court held that it was reasonable for a consumer to believe that if he or she purchased ten gallons of fuel at a participating Shell gas station, he or she would get a free lift ticket. Therefore, the Court denied Shell’s motion to dismiss the breach of contract cause of action and allowed the false advertising class action to proceed.
The Importance of Truth in Advertising
The Federal Trade Commission and the plaintiffs’ class action bar closely scrutinize the truth (or deceptiveness) of all types of advertising and marketing materials. Large settlements and court judgments have been entered against advertisers and retailers that fail to follow applicable state and federal advertising rules and regulations. As such, it is critical for marketers to secure seasoned advertising counsel in connection with prospective marketing campaigns or risk facing a false advertising investigation or lawsuit.
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Shell, Eni, and the $533 million paid out in Nigerian bribes
In October 2014 the media reported that Italian prosecutors were alleging that half of the $1.1 billion paid for an oil producing lease (OPL) by Eni and Royal Dutch Shell had gone on bribes to Nigerian politicians, intermediaries and others.
Extracts from an article by Babajide Oladipo Ogundipe: 8 December 2014
In October 2014 the media reported that Italian prosecutors were alleging that half of the $1.1 billion paid for an oil producing lease (OPL) by Eni and Royal Dutch Shell had gone on bribes to Nigerian politicians, intermediaries and others. Reuters reported that Italian prosecutors had placed Eni’s former and current chief executive officers under investigation for alleged international corruption and had requested their UK counterparts to assist in freezing suspect assets. The prosecutors alleged that at least $533 million had been paid out to Nigerian officials and others as part of the scheme. The two individuals under investigation, along with Eni, denied any wrongdoing
This case, involving OPL 245, has seen many twists and turns over the past few years. In April 1998 Nigerian company Malabu (incorporated less than one week before) was granted OPL 245 over an area approximately 2,000 square kilometres off the Nigerian coast, in the Eastern Niger Delta region, by the incumbent military-led government. It later emerged that the then minister of petroleum resources had a major – if not the entire – beneficial interest in the company. In submissions to an investigation commenced by the House of Representatives in October 2012, the government described the grant of OPL 245 to Malabu as “flawed” and “unethical”.
In March 2001 Malabu assigned a 40% interest in the OPL to a company owned by Shell. However, four months later, the civilian government, which had been in office since late May 1999, revoked the licence. In May 2002 Nigeria’s state-owned petroleum corporation entered into a production sharing contract in respect of OPL 245 with the Shell company that had previously taken a 40% interest in the block. This sparked a dispute between Malabu and Shell, and in late December 2006 OPL 245 was re-awarded to Malabu. This development resulted in Shell commencing International Centre for Settlement of Investment Disputes arbitration proceedings against Nigeria.
Malabu, being essentially a shell company with no assets other than OPL 245, had no means of exploiting OPL 245 other than with the assistance of a major oil company. However, with all the controversies swirling around OPL 245, it was unsurprisingly unable to make any progress towards finding a partner. OPL 245 was eventually transferred to Shell and Eni through an arrangement that saw Malabu relinquish its interests in OPL 245 to the Nigerian government in exchange for $1,092,040,000. On the same day, Shell and Eni agreed to pay the Nigerian government the same amount in exchange for rights over OPL 245. New York Supreme Court Justice Bernard J Fried described the role of the Nigerian government as that of “the proverbial straw man” who was “holding $1.1 billion for ultimate payment to Malabu”. This sum was paid to an escrow account with JP Morgan Chase and at least $800 million was disbursed to Malabu on the instructions of the Nigerian government. The English High Court froze $215 million in July 2011 on the application of a company that claimed to be entitled to fees for assisting in the negotiation of the transaction that saw Malabu receive the $1,092,040,00 indirectly from Shell and Eni. This was paid into court the following month, and in a judgment delivered in July 2013, $110.5 million was awarded to the company, with the balance to be returned to Malabu.
Will Shell Transform Mexico’s Oil Production?
Will Royal Dutch Shell plc (RDS.A) Transform Mexico’s Oil Production?
Bidness Etc looks at how Shell’s expertise and experience could help revolutionize Mexico’s energy sector
By: MICHEAL KAUFMAN
Published: Dec 8, 2014 at 3:55 pm EST
Ever since Mexican President Enrique Pena Nieto revoked the ban on foreign investment in the country’s energy sector, Mexico’s state-owned oil company, Petroleos Mexicanos (PEMEX), has seen competition popping up after having enjoyed a 76-year-long monopoly.
One major oil giant that is optimistic about future projects in Mexico is Royal Dutch Shell plc. (ADR) (NYSE:RDS.A). Shell has been involved in oil exploration and production on the US side of the Gulf of Mexico for over 30 years and is among the top producers there. Currently, the company is operating at the Perdido Fold area on the Gulf of Mexico.
PEMEX happens to have discovered huge amounts of oil on the Mexican side, which it is not ready to deal with, it appears. Almost 76 years of foreign-investment restrictions have meant PEMEX has not been exposed to new drilling techniques and innovations; it is looking for foreign partners to help tap these resources and Shell seems to be one of its best bets. The two companies have entered into a 20-year partnership over a Houston oil refinery.
Shell’s director of America’s upstream operations, Marvin Odum, said, “We basically built, developed and operate the Perdido development, which, potentially, is an advantage in these circumstances. We bring not only a broad set of skills but a very specific set of skills that might be very close to some resources that have been discovered on the Mexican side.” Shell has been in Mexico for 60 years, he added.
Mr. Odum said compared to the US side of the Gulf of Mexico, the Mexican Gulf is underdeveloped, with significant amount of unexplored reserves, which Shell aims to explore. He said these projects take a long time to initialize; by then, crude prices will have stabilized, he believes.
Mexican authorities are currently determining the percentage of national reserves that will be available for foreign exploration. Regulators are also developing model contracts to specify certain requirements foreign companies will have to undertake to engage in exploration and production in Mexico. Parts of the model contract will then be incorporated in final contracts when the first tender is issued next year.
This development could be highly beneficial for the Mexican economy; not only will oil production increase but PEMEX will also have a chance at learning and adopting latest techniques of drilling and production from the several foreign companies that will potentially work in the region.
Update on OSSL Shell Scandal
By John Donovan
At the weekend I published an article under the headline: “Irish Police reopen and expand investigation into Shell corruption case?”
A question mark was placed at the end of the headline to denote a degree of uncertainty.
This is my take on the actual situation according to information I have received today.
After pointing out that a recent Garda Ombudsman Commission (GSOC) investigation found no evidence of the alcohol supplied to Garda officers by OSSL on behalf of Shell and stating that the matter is closed, the Irish Justice Minister, Frances Fitzgerald, grudgingly invited OSSL to contact the GSOC with any evidence to support various related allegations.
OSSL has subsequently had contact with the Internal Affairs department of the Garda who passed on to the GSOC correspondence OSSL has supplied to Internal Affairs. It includes reference to a new subject relating to Shell.
Kevin Duffy, a case officer at the GSOC has given the relevant correspondence a case reference number and has asked OSSL if it wants to have the correspondence considered by the GSOC as a formal complaint. This is subject to various criteria, including a time limit of 15 December to supply further information.
The TRUTH will set you FREE.
