An example of the once-booming oil industry in the Gulf of Mexico, ATP Oil and Gas Corporation began in 1991 and targeted unproven oil reserves, hoping to make the productive and profitable. Initially the company was successful in offshore drilling and production, but a series of events, a moratorium on drilling after the BP accident, and a series of accidents, fines and lawsuits, everything went off the rails for ATP.
The company filed for Chapter 11 bankruptcy in 2012 and has struggled to recover ever since. The CEO at the time has blamed the BP Deepwater Horizon explosion and subsequent oil spill, saying that the drilling moratorium prevented the company from making a profit and being able to pay creditors. This wasn’t the company’s only problem, though, as it faced accidents that hurt and killed workers, as well as environmental accidents and the lawsuits and fines that came with them.
ATP Oil and Gas was founded in 1991, largely to target oil fields in the Gulf of Mexico, but also with sights set on the North Sea. Both regions are rich in oil reserves and have long been developed by numerous offshore companies, most much larger and with greater resources than ATP. What ATP set out to do was to tap proven sites as yet undeveloped. This meant they could skip the costly exploration phase that requires time and expertise in addition to monetary investment.
Right out the gates, ATP saw results with this approach and had a 97 percent success rate with drilling at proven, undeveloped sites. At one time the company held leases and interests in 12 blocks in the North Sea and 50 blocks in the Gulf of Mexico. ATP filed for bankruptcy in 2012 and has not emerged in its former glory and has instead had to sell assets to appease creditors.
Accidents and Fatalities
Before it went under, ATP Oil and Gas faced its fair share of accidents that harmed and even killed workers. Drilling for offshore oil is a dangerous business. In addition to working in rough waters and often terrible weather, workers use large, complicated equipment. If anything goes wrong with the equipment, or someone makes a mistake, the results can be deadly. Additionally, working with flammable oil and gas can lead to fires and explosions.
One such accident involving ATP and its workers occurred on an offshore platform called the Grand Isle 9A in the Gulf of Mexico in 2006. ATP jointly owned the platform with Exxon Mobil. On July 8th, at 4:30 in the morning a fire started on the platform. At the time the platform was shut down for repairs and the fire did not last long. Unfortunately, though, it did result in the death of one contract worker. Two others were safely evacuated and not injured.
Sometimes the accidents that strike offshore oil companies like ATP are not necessarily harmful to workers, but may cause a huge amount of environmental damage. This is always a risk with drilling for underwater oil, as any break, spill, or explosion can mean that millions or billions of gallons of oil pollute the surrounding waters before it can be contained.
ATP was found guilty of allowing both oil and a chemical dispersant to leak from its ATP Innovator platform in the Gulf of Mexico in 2012. The company was found to be in violation of the Clean Water Act and the Outer Continental Shelf Lands Act. As a result of the violations, ATP was forced to pay over $41 million. Most of that, $38 million, was for violations of the Clean Water Act and the rest for violating the Outer Continental Shelf Lands Act.
The Deepwater Horizon Spill and ATP’s Downfall
At the time that the company was found to be in trouble for violations and fined, it was already beginning Chapter 7 bankruptcy proceedings. Eventually ATP would file Chapter 11 and struggle to come back from that. Some might see that incidents like the environmental accidents could have led to bankruptcy, but the company claims that their problems ultimately came from British Petroleum, BP, the Deepwater Horizon incident, and the subsequent halt in drilling in the Gulf of Mexico.
The incident occurred on April 20, 2010 with the Deepwater Horizon, a semi-submersible oil rig 50 miles off the coast of Louisiana. A huge blowout at the well led to a devastating explosion that killed eleven workers and sank the oil rig two days later. The connection to the seafloor was severed and the blowout preventer failed. Nearly five million barrels of oil spilled into the Gulf of Mexico before it could be stopped months later. It was the worst offshore oil accident in the history of the U.S.
As a result of this terrible tragedy, which killed workers and devastated the coastlines of Louisiana, Mississippi, and Alabama, President Obama issued a moratorium on drilling in the Gulf of Mexico for nearly a year. As ATP went into bankruptcy it blamed this moratorium for its failure. It relied heavily on the Gulf for its oil production and without production, could not earn revenue. The company even tried to sue BP over the incident, but courts ruled that BP wouldn’t have to face those kinds of lawsuits.
The Rights of Maritime Workers
There are so many kinds of accidents that can occur during offshore drilling. The Deepwater Horizon was an extreme example, but as ATP has seen, accidents can be smaller and still devastating. Maritime workers involved in these accidents have a right to seek compensation for their injuries, to cover medical bills, and to cover lost wages and potential earnings.
Laws like the Outer Continental Shelf Lands Act are in place to protect offshore workers. If you have been injured in any kind of offshore maritime work, you may be protected by this law. To find out what your rights are and what you can do to get compensation for your injuries, contact a professional and experienced maritime lawyer.