Cook Inlet-bound Drilling Rig Diverted to Canadian Port
Under contract to Escopet which is a Houston-based oil company, the Spartan 151 jack-up arrived on a heavy haul vessel in Vancouver, Canada. It was supposed to be a short layover off Prince Rupert while en route from the Gulf of Mexico to Cook Inlet to deliver the jack-up drilling rig that will be used to drill its upper Cook Inlet Kitchen Lights unit.
Spartan was concerned that its jack-up might be confiscated and its request for a Jones Act waiver was due to the concern that it might be subject to a substantial fine for having the rig offloaded in Alaska. The Jones Act prohibits the transport of goods by a foreign-flagged vessel between two U.S. Ports. On May 25, Spartan filed for an immediate injunction in the District Court of Harris County, Texas. The court denied the request on May 26, although it did set a hearing date for mid-June.
U.S. Department of Homeland Security Secretary Janet Napolitano said that the federal government had no intention of confiscating the rig when it was offloaded in Alaska and that only Escopeta would be fined for violating U.S. maritime law were not enough for jack-up owner Spartan Offshore Drilling, which is demanding Escopeta get a new Jones Act waiver per their agreement.
Nelson Peacock, assistant secretary of the Office of Legislative Affairs, which is part of Homeland Security, said in an email, “I have talked to officials at CBP (Homeland’s Customs and Border Protection’s Border Security and Trade Compliance division) and they have confirmed to me that they cannot provide such a letter before a violation occurs. Even if such a letter were to be issued, it would not be legally binding because the violative act justifying penalties or other enforcement has yet to take place. However, I have talked to CBP and they have authorized me to pass along what we have communicated to Mr. Davis’s attorneys — that CBP only intends to take enforcement action for the Jones Act violation against Escopeta. They do not intend to take any legal action against any other parties for the Jones Act violation in this case.”
Coscol, the China-based owner of the heavy lift vessel Kang Sheng Kou, which is being used to transport the rig to Alaska, was also looking for more guarantees before it would offload the Spartan 151 in Kachemak Bay. From there, it was to be towed by U.S. tugs to the OSK dock at Nikiski. Spartan and Coscol wanted the rig to be moved to Vancouver, which Davis decided to do, in spite of the increased cost. The change in destination will impact Escopeta’s drilling schedule. At the start, the company hoped to spud its first well between June 21 and June 30.
Danny Davis told Petroleum News that he hopes to be on location in early July. He said, “The work on the rig that we were going to do with U.S. companies at the OSK dock at Nikiski, Alaska, is going to have to be done by Canadian workers in Vancouver. It’s a shame.”
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