XOM Yellowstone Mishap Costs $1.7M - Analyst Blog
28 Marzo 2013 - 4:10PM
Zacks
U.S. super major ExxonMobil
Corporation (XOM) has been fined $1.7 million by the U.S.
Department of Transportation, as per Reuters.
The regulators have charged ExxonMobil of violating pipeline safety
with respect to a 2011 oil spill in the Yellowstone River.
ExxonMobil’s Silvertip pipeline spilled about 1,500 barrels of oil
into the river in Jul 2011, caused by heavy flooding in the area.
The pipeline used to transport 40,000 barrels of crude per day in
Montana.
Earlier, the company had stated that the mishap has cost ExxonMobil
around $135 million.
The U.S. Pipeline and Hazardous Material Safety Administration
(PHMSA) had initiated an enforcement action against ExxonMobil on
grounds of ignoring risks to the Silvertip pipeline system from
river flooding, scour and erosion.
The threats due to flooding on Yellowstone River were known to
possibly loosen the pipe’s support and result in a rupture. The
accident would have been two-thirds smaller had the company worked
on these warnings before.
Further, the PHMSA also charged ExxonMobil on the context of its
failure to institute written emergency response plans for its staff
in the aftermath of a spill. The company has since bored holes
beneath the river to bury the pipeline deeper underneath the
surface. However, the company has not made any public comment on
the PHMSA decision so far.
ExxonMobil is the world’s largest publicly traded oil company,
engaged in oil and natural gas exploration and production,
petroleum products refining and marketing, chemicals manufacture,
and other energy-related businesses. Approximately 83% of
ExxonMobil’s earnings come from its operations outside the U.S.
ExxonMobil holds a Zacks Rank #3 (Hold). However, the Zacks Ranked
#1 stocks of Stone Energy Corporation (SGY),
Range Resources Corporation (RRC) and EPL
Oil & Gas, Inc. (EPL) are expected to outperform the
market over the next few months.
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
STONE ENERGY CP (SGY): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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