A subsidiary of Houston-based Talos Energy was fined $4 million and sentenced to three years probation by a Louisiana federal judge after it was discovered to be breaking safety and environmental laws while producing oil and gas in the Gulf of Mexico.
The subsidiary Energy Resource Technology pleaded guilty to charges by the U.S. Department of Justice it had been illegally discharging drilling waste into the Gulf and was not following federal protocols when it came to welding and the testing of blowout preventers — a device designed to stop oil leaks in the event of an accident.
Talos was formed in 2012, in the thick of the U.S. oil boom, with $600 million from private equity firms Apollo Global Management and Riverstone Holdings, according to the company’s website. Led by CEO Tim Duncan, Talos acquired Energy Resource Technology in 2013 for $620 million. Last summer, the Houston company reported production of 28,000 barrels of oil equivalent a day.
In a statement Monday, Talos said it had undertaken operational changes at Energy Resource Technology since the deal.
“Following our internal audits we reported violations to the appropriate authorities, which in part have led to the current settlement with the Department of Justice. This settlement allows us to resolve these legacy issues and move our organization forward,” the company said. “Talos has a zero-tolerance policy regarding regulatory non-compliance and we are committed to getting this exactly right.”
The four violations, which took place between November 2012 and June 2015, were discovered during an investigation by the U.S. Department of Interior’s Office of Inspector General and the Bureau of Safety and Environmental Enforcement.
According to the justice department, Energy Resource Technology’s contractors attempted to cover up the illegal discharges, using “a coffee filter or other similar means” to clean water samples ahead of government inspections.
“When oil and gas operators cut corners and break the law, EPA will work with its law enforcement partners to hold them accountable in order to protect human health and the Gulf Coast ecosystem from harm,” said Ted Stanich, acting director of the U.S. Environmental Protection Agency’s criminal enforcement program.
During the three year probation, Talos will operate under heightened federal oversight over its safety and environmental protocols, the justice department said.