For the second time in three months, I find myself responding to the opinion expressed by the editor of a weekly paper widely distributed throughout my region.
While I agree with Ms. Restino's view (Dec. 14, "Alaska must tell yahoo cowboys like Noble Drilling to hit the trail") that there needed to be changes made to Noble Drilling's operations, I am disappointed that she is dredging up information that is more than two years old and repackaging it like it's something new. This is misleading to the people who live in my region.
Arctic In?upiat Offshore LLC (AIO) is a privately held corporation established to promote sustainable economic development within the Arctic Slope region. AIO is comprised of Arctic Slope Regional Corp., Tikigaq Corp., Olgoonik Corp., Ukpeag?vik In?upiat Corp., Atqasuk Corp., Nunamiut Corp. and Kaktovik In?upiat Corp.
AIO's investment ensures that we have a seat at the table with Shell when decisions are made regarding their program, and it also provides an avenue where we can address our concerns before they become larger issues within our region. That's why we worked so diligently with Shell to make the agreement happen.
As I mentioned in my October commentary responding to a previous commentary by Ms. Restino, even before AIO finalized its agreement with Shell in July 2014, AIO leadership was aware there most likely would be criminal charges against Noble Drilling. In fact, after the U.S. Coast Guard passed the violations along to the Department of Justice (DOJ), we knew it was only a matter of time.
AIO is disappointed by the actions taken by Noble two years ago and by the findings of the investigations. However, while their actions are not aligned with our business practices and values, we understand that since the violations were reported by the USCG after its inspection and by Noble after a self-audit, more than $126 million in upgrades were made on the Noble Discoverer to address those issues. We also know that Noble cooperated with the USCG and DOJ during the course of the investigation. Noble made significant changes to its management personnel and has enhanced its entire safety and environmental management program significantly; it also instituted new compliance training and enhanced existing training. These facts were left out of Ms. Restino's Dec. 14 commentary.
Let's be clear. Noble Drilling has admitted to breaking the law in 2012, and the company is now paying the price. Under the terms of the settlement agreement, Noble Drilling is on four years' probation and is required to pay more than $8 million in fines. The company was also directed by the DOJ to pay an additional $4 million in community service contributions. The Arctic Research Consortium of the United States will receive $500,000, the International Arctic Research Center of the University of Alaska Fairbanks will receive $2.5 million and the National Fish and Wildlife Foundation will receive $1 million.
Noble is also required put in place a comprehensive Environmental Compliance Plan as well as set up an environmental management system for all of its U.S. mobile offshore drilling units. On top of that, Noble is required to have both a court-appointed third-party auditor as well as a court-appointed independent auditor who will monitor Noble's compliance and implementation of the Environmental Compliance Plan. These auditors will report the results directly to the DOJ and USCG.
In my opinion, the level of the consequences for Noble and oversight going forward has met the seriousness of the violations. This is how our legal system is supposed to work.
As a group, AIO had been engaged in not only understanding Noble's transportation, maintenance and safety violations that occurred in 2012 -- but also what they have done to fix those problems since. It is also why AIO leadership will soon meet with Noble executives as well as inspect the Discoverer to view improvements before it returns to the Arctic.
I firmly believe our continued involvement in the new program will be critical to the success and the safety of Chukchi development as well as to the benefits it can provide to our current as well as future shareholders.
Because the people of our region expect nothing less, AIO will continue to perform its due diligence regarding offshore development and will critically monitor the risks. And, when necessary, stand up and defend itself against those with a single-minded purpose of curbing opportunity.
Rex A. Rock Sr. is the president of Arctic In?upiat Offshore LLC, and the president and CEO of Arctic Slope Regional Corp.
The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.