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Cook Inlet driller fined $15M for Jones Act violation

Craig MedredAlaska Dispatch

According to Petroleum News (via the Anchorage Daily News), U.S. Customs and Border Protection has levied a $15-million fine against Escopeta Oil Inc. for violating the Jones Act in shipping a jack-up rig to Cook Inlet from Texas with a foreign-flagged vessel. The fine is equivalent to the value of the Spartan 151 rig itself.

The Jones Act is a maritime law that prohibits the transport of goods between U.S. ports by foreign vessels.

Customs, a division of Department of Homeland Security (DHS), said Escopeta has 60 days to file a "petition for relief" detailing any "extenuating circumstances" to appeal the fine.

Escopeta had applied for the renewal of a Jones Act waiver granted the project in 2006, but it fell through when the Department of Energy did not concur that Cook Inlet region was experiencing a natural gas shortage. On its way to Alaska, the rig was diverted to a port in Canada.

Danny Davis, president of Escopeta when the jack-up left Texas told Petroleum News, "I don't think we owe any fine whatsoever. I don't think Escopeta broke any laws taking the rig from Galveston to the Cook Inlet."

Read much more, here.