One Dead, at Least Three Injured by Explosion at Fieldwood Energy, L.L.C.’s Echo Platform in Gulf of Mexico

Offshore-Maritime---Oil-Platform-Accidents---shutterstock_124714042NEW ORLEANS, November 21, 2014 – An explosion occurred on the Echo Platform, operated since July 2014 by Fieldwood Energy L.L.C. of Houston, killing one and injuring at least three on November 20, 2014. The platform is located at West Delta 105 in the Gulf of Mexico, approximately 12 miles off the coast of New Orleans, where Houston-based Apache Corp. drilled three wells in 2001. The platform sits in about 220 feet of water, and is considered a shallow-water rig. Three injured workers, one of whom reportedly suffered serious injuries, were being treated at an onshore medical facility, according to the operator. The platform was not in production at the time of the explosion, and had not been producing for over a week while the facility was undergoing “routine maintenance operations.” Facility damage was limited to the area of the explosion, and no pollution was reported. An investigation into the cause of the explosion is being conducted by the Bureau of Safety and Environmental Enforcement (BSEE). The response is being coordinated with the BSEE and the U.S. Coast Guard. Fieldwood revealed today that the explosion “occurred when employees of Turnkey Cleaning Services [specializing in cleaning of offshore facilities] were cleaning a heater treater, which is a piece of equipment that separates oil from water and other liquids.”

Fieldwood Energy, L.L.C., formed in 2012, is a portfolio company of New York-based private-equity firm Riverstone Holdings, L.L.C., who committed an additional $82 million in funding to Fieldwood in March 2014. In the past year and a half, Fieldwood has become the largest operator in the Outer Continental Shelf of the Gulf of Mexico. In July 2013, Fieldwood acquired Apache Corp.’s Gulf of Mexico shelf portfolio, consisting of over 600 Gulf of Mexico platforms, and more than 500 blocks – including West Delta blocks – with 1.9 million net acres. As part of the $3.75 billion acquisition, Fieldwood hired Apache’s 435 offshore workers and 85 office employees. In February 2014, Fieldwood acquired the Gulf of Mexico oil reserves and Gulf Coast business unit from SandRidge Energy, Inc., which also operates the deepwater Bullwinkle field and associated platform in approximately 1,350 feet of water. The deal added 150 blocks of leased Gulf territory to Fieldwood’s portfolio. Prior to the $705 million acquisition, Fieldwood expected the combined SandRidge Energy and Fieldwood business to spend over $1 billion per year on Gulf of Mexico operations. Fieldwood’s CEO, whose previous venture was sold to SandRidge Energy for $1.3 billion in 2012, was quoted after the Apache Corp. acquisition as saying “Fieldwood has 12 employees today, so we look at this as inserting our small team inside the Apache Gulf shelf team, not the other way around.”

Although Fieldwood referred to the explosion as “an isolated incident,” Fieldwood is no stranger to safety violations. Federal officials have cited the facility for offshore oil regulation non-compliance on 38 separate occasions since 1997, 18 of which were during drilling activity in 2001. In 2013, of the seven inspections conducted at six facilities, the BSEE issued four warning incidents of non-compliance (INCs) and three component shut-in INCs to Fieldwood Energy. The BSEE conducted 564 inspections of 340 Apache Corporation facilities in the same year, resulting in 172 warning INCs, 89 component shut-in INCs, and 10 facility shut-in INCs. As of October 14, 2014, the BSEE had conducted 303 inspections of 251 Fieldwood Energy facilities, issuing 81 warning INCs, 91 component shut-in INCs, and 9 facility shut-in INCs. From the 164 inspections of 142 Apache Corporation facilities, the BSEE issued 78 warning INCs, 41 component shut-in INCs, and 4 facility shut-in INCs.

Herman, Herman & Katz is well-versed in assisting those injured in the notoriously dangerous environment of the offshore drilling industry. As lead counsel on the Deepwater Horizon oil spill litigation against BP and others, Herman, Herman & Katz fought for and achieved justice in the largest maritime case in history.



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