BLM announces record settlement in oil site security dispute

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Apr. 1 -- The US Bureau of Land Management reached a $2.1 million settlement with Berry Petroleum Co. in what the federal agency said was the largest civil penalty agreement in its history. The Mar. 31 settlement resolved a dispute over submission of inaccurate site security diagrams for oil production facilities on federal and Indian lands in Utah, BLM indicated.

It said that a joint investigation by BLM and the US Department of Interior inspector general’s office found that from 2005 to 2007, a Berry employee had installed disabled equalizer valves on 154 well sites in Utah’s Brundage Canyon area. BLM’s regulations governing proper operation of the valves help to ensure an accurate accounting of production volumes, it noted.

The investigation found that the employee, who BLM did not identify, also prepared 140 diagrams that incorrectly showed the equalizer valves would be sealed closed when the storage tanks were in the sales phase. The stated motivation of the Berry employee who had the disabled valves installed was to avoid overflow spills from the tanks, according to BLM.

It emphasized that the investigation found no evidence that Berry’s senior management knew that the valves were disabled or the diagrams were incorrect. The Denver-based independent producer replaced the disable valves with functioning units once BLM notified it of the problem, it added.

There was also no evidence of loss of oil or of royalty revenue, nor harm to the environment, as a result of the violations, BLM said. Berry did not immediately respond to OGJ’s request for a comment on the matter.

Contact Nick Snow at nicks@pennwell.com.



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