Alaska Beat

Cook Inlet gas explorer fined $15 million for violating maritime law

The U.S. Customs and Border Protection has upheld an order that Escopeta Oil pay $15 million for violating federal law when it hauled a jack-up drilling rig on a foreign-flagged ship to Alaska.

The agency wants payment by the end of March, according to an article in the Maritime Executive.

Escopeta is the Houston, Tex.-based company that announced a huge but questioned natural-gas discovery in Cook Inlet last fall, motivated by a $25 million tax incentive offered by the state.

In denying a petition for relief from the company, U.S. Customs said Escopeta deliberately violated the Jones Act when it brought a Spartan 151 drilling rig to Alaska on a Chinese-owned ship, according to the article.

The company has claimed no U.S.-flagged ship was available last year to deliver the rig, which started its journey in Texas.

U.S. Customs says that's not true. Escopeta had received a letter informing them that Crowley Maritime Corp., based in Florida with operations in Alaska, could haul the rig, according to the article.

Before the shipment, Escopeta had requested waivers from the Jones Act, which requires that U.S.-flagged ships haul goods between U.S. ports. But those petitions were rejected.

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John Connors, chief of U.S. Customs Penalties branch, said that Escopeta was racing to Cook Inlet to beat other competitors to the tax credit.

The article notes that between the fine and the tax credit, the company's plan may have paid off: It will still net $10 million with the tax credit.

Read more here.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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