Helmerich & Payne International Drilling Company Sentenced To $6.4 Million Criminal Penalty For False Writings Related To Well Control Testing
HELMERICH & PAYNE INTERNATIONAL DRILLING COMPANY (“H&PIDC”), a corporation headquartered in Tulsa, Oklahoma, pleaded guilty today before the Honorable Magistrate Judge Sally Shushan to one count of violating Title 18, United States Code, Section 1018 which charged the drilling company with knowingly making and delivering false writings in connection with the company’s drilling activities in Gulf of Mexico. Pursuant to a plea agreement with the United States Attorney’s Office for the Eastern District of Louisiana, H&PIDC was sentenced today to pay a total monetary penalty of $6.4 million and placed on a three year term of probation during which it must institute and comply with an environmental compliance plan that incorporates increased well control monitoring and enhanced training for all their offshore drilling rig employees.
According to the court documents, from on or about October 14, 2009 until on or about May 27, 2010, H&PIDC owned and operated drilling Rig 206. Rig 206 was contracted by the lessee of a federal mineral lease to conduct oil drilling operations on MC 109 in the Gulf of Mexico. As mandated by federal regulation, Rig 206 was equipped with a safety device known as a blowout preventer system designed to ensure well control and prevent potential release of oil and gas and possible loss of well control. The blowout preventer system consisted of multiple components including a blowout preventer, choke and kill lines, and a choke manifold. The choke manifold was an arrangement of piping and valves designed to direct flow and control pressure from the well. As mandated by federal regulation, the blowout preventer system must be routinely pressure tested, and the entire system must pass the pressure test prior to continuing drilling operations. The requirements for testing the blowout preventer system include conducting pressure tests of the choke manifold valves.
On six occasions from on or about January 1, 2010 until May 27, 2010, five H&PIDC employees had deliberately not tested a number of valves on the choke manifold because they knew or believed that certain valves would leak. H&PIDC employees on Rig 206 deliberately created false blow out preventer test charts and pressure charts by closing manifold valves behind the ones they knew or believed would leak. When inspectors arrived onboard Rig 206 for inspections to include verifying that the blowout preventer system had been properly tested, the crew provided them with the falsified test charts and pressure charts. The former H&PIDC employees falsified the testing records for the benefit of the defendant, H&PIDC, to minimize downtime and costs associated with repairs.
Within 24 hours of notification that an employee on Rig 206 had deliberately falsified choke manifold tests by closing choke manifold valves behind other choke manifold valves that they knew or believed would leak, executives at H&PIDC notified the leaseholder and requested that the leaseholder notify personnel at the agency now known as BSEE that persons on Rig 206 had falsified the choke manifold tests by falsely reporting that every valve on the choke manifold was successfully pressure tested. After an internal investigation, H&PIDC terminated four of the H&PIDC employees who participated in the test falsification and demoted the one H&PIDC employee involved in the falsification who reported the conduct to the company.
Of the 6.4 million dollar criminal penalty, one million dollars is designated to go to the National Academy of Sciences as a community service payment for funding research to identify options to improve and promote offshore industry safety culture. During the three year term of probation, H&PIDC is subject to an environmental compliance plan (“ECP”). The ECP requires that H&PIDC develop and implement training and safety culture programs and requires, inter alia, the company to review their offshore drilling contracts as they relate to downtime and the costs associated with downtime, and implement well control equipment testing improvement solutions such as third party inspections of well control testing on H&PIDC offshore rigs.
The Director of the Bureau of Safety and Environmental Enforcement, Brian Salerno, praised DOJ's actions, stating, "the safety of offshore workers and the environment is dependent on the integrity of the safety and control equipment. Companies need to be on notice that falsification of test results will not be tolerated. "
The case was investigated by the Department of Interior-Office of Inspector General. The case was prosecuted by Assistant United States Attorney Emily K. Greenfield. The U. S. Attorney’s Office would also like to acknowledge the assistance provided by the Bureau of Safety and Environmental Enforcement’s New Orleans District.