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Oil platform blaze off Louisiana leaves workers missing

Source: Thomson Reuters Foundation - Fri, 16 Nov 2012 11:44 PM
Author: Reuters
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* Operator Black Elk has history of rig incidents -data

* Four workers critically injured with burns

* Risk to environment from small oil sheen low - officials

* Fire may reignite safety debate after BP spill settlement (New throughout, updates with reaction from environmental group, former US senator)

By Kristen Hays and Joshua Schneyer

HOUSTON/NEW YORK, Nov 16 (Reuters) - An oil platform in the Gulf of Mexico off the Louisiana coast exploded on Friday, leaving two people missing and badly injuring several others, recalling the horror of the 2010 Deepwater Horizon disaster.

The fire ignited when workers were welding a pipe on the deck of the shallow-water platform operated by Houston-based Black Elk Energy. Eleven workers were injured, including four who suffered severe burns.

The fire was extinguished, and the U.S. Coast Guard said there appeared to be little risk of a major oil spill like the one that followed rupture of BP Plc's 's mile-deep Macondo well in 2010.

Unlike Macondo, no oil was flowing up to the Black Elk platform at the time of the explosion because production was shut off before the fire. Black Elk told authorities that any spill could be as little as 28 gallons. When the platform caught fire, 22 workers were aboard, the Coast Guard said.

The Coast Guard said 11 people were airlifted to hospitals while nine others were evacuated to other nearby energy facilities. Search and rescue helicopters were scouring the area, located around 17 miles south of Grand Isle, Louisiana.

No fatalities have been confirmed but two workers were missing. The 11 hurt included four who suffered burns and were in critical condition at Louisiana's West Jefferson Medical Center, a hospital spokeswoman said.

The incident happened a day after oil giant BP reached an agreement to pay record penalties of ${esc.dollar}4.5 billion for its role in the 2010 Macondo disaster, which killed 11 workers and spewed 4.9 million barrels of oil into the Gulf.

Black Elk's platform sits in 56 feet of water and was not producing oil, unlike the rig involved in the BP disaster, which had been drilling in waters nearly a mile deep.

"They were not actively drilling," said Coast Guard spokesman Glenn Sanchez. "They were cutting a pipe or doing some type of maintenance that may have resulted in the explosion and fire."

The federal Bureau of Safety and Environmental Enforcement (BSEE), which enforces offshore drilling regulations, said it was sending safety inspectors to the Black Elk platform.

Black Elk spokeswoman Leslie Hoffman said an emergency response was under way, but declined further comment.

Federal data and SEC filings show that Black Elk, a minor producer in the Gulf, has a recent history of close calls, platform incidents and fines, including a ${esc.dollar}300,000 federal penalty it paid in September.

The incident could reignite a national debate over safety standards for offshore drilling. After the Deepwater Horizon spill, the government overhauled regulations and imposed a ban on offshore drilling that lasted for several months.

"This incident raises a number of questions about the nature and adequacy of safety measures on this offshore rig," said U.S. Representative Ed Markey Of Massachusetts, the ranking Democrat on the House National Resources Committee.

Frances Beinecke, president of the Natural Resources Defense Council said the explosion was "a sad reminder that offshore drilling is an inherently dangerous business, and that "workers and communities are put in harm's way every day."

"I don't think there's any insurance policy that can be issued that this will never happen again," said former U.S. Sen. Bob Graham, who co-chaired a White House panel that probed the 2010 spill.

Graham said Friday's accident was unusual because it happened in shallow waters, where the oil industry has been operating for more than 70 years, rather than the more technically challenging deepwater arena.

A HISTORY OF CLOSE CALLS, FINES

Offshore producer Black Elk was founded in 2007 by CEO John Hoffman, a former BP Amoco executive, according to an interview with him published in the Houston Business Journal in April.

The firm holds at least 88 oil and gas leases, according to U.S. government data. Its SEC filings show Black Elk pumped some 14,000 barrels of oil and natural gas equivalent per day last quarter.

It recently announced a major expansion, with plans to drill 23 new wells in the Gulf of Mexico starting this month, according to a company website.

In a company filing, Black Elk lists New York hedge fund Platinum Partners Value Arbitrage Fund as its majority equity owner. Platinum declined comment.

Government data and company filings show a recent history of fines and safety issues involving Black Elk offshore rigs. BSEE investigated the company as recently as August for an incident in which two employees were dropped 60 feet into Gulf of Mexico waters due to a crane malfunction. No injuries were reported.

In September, while repairing a leak at another well on a platform in the High Island area of the Gulf of Mexico, workers were forced to activate a blowout preventer. Last month, regulators ordered the well to be plugged and abandoned.

SEC filings also show that Black Elk paid a ${esc.dollar}300,000 civil fine in September, related to compliance issues revealed during a 2011 site inspection of one of its facilities. A small fire occurred at a Black Elk platform in February, 2011, in the Gulf of Mexico, but was quickly contained, according to a report filed with the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, a predecessor of BSEE.

Black Elk specializes in acquiring mature oil and gas properties from other companies, according to a July report in the magazine Hedge Funds Review, which says it has spent ${esc.dollar}600 million on wells since 2009. (Reporting By Kristen Hays, Joshua Schneyer, Scott DiSavino, Matthew Robinson, David Sheppard, Anna Driver, Roberta Rampton, Robert Campbell, Selam Gebrekidan, Edward McAllister, Robert Gibbons, Cezary Podkul, Erwin Seba, Jeanine Prezioso and Timothy Gardner; Editing by Gerald E. McCormick, David Gregorio, Bob Burgdorfer, and Chris Baltimore)

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