MSC reaches another California oil spill settlement

Swiss-based container shipping major MSC Mediterranean Shipping Company has accepted to enter into another settlement agreement with Amplify Energy Corp. and its affiliated entities in connection with the 2021 Orange County pipeline oil spill. 

US Coast Guard

The notice comes almost a month after the shipping company announced it has accepted the initial settlement with the parties over the incident.

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MSC’s agreement to enter in a settlement with Amplify and the other parties is made without an admission of liability but is intended to move yet another step past the regrettable incident, the company noted.

To remind, MSC has been identified as the party of interest in the local investigation after its boxship MSC Danit dragged anchor near the underwater pipeline in January 2021. Another container shipping vessel was identified as dragging anchor in the area at the time, COSCO Beijing, which is operated by Costamare Shipping Co, during severe weather.

Amplify, owner of the pipeline, sued the two containership operators and Marine Exchange of Southern California claiming it failed to direct the ships to deeper waters and failing to inform Amplify of the anchor-dragging incidents.

The oil spill resulted in the discharge of approximately 25,000 gallons of crude oil in October 2021 during an offshore leak in the 17-mile-long San Pedro Bay Pipeline.

The pipeline is linked to the Elly drilling platform off the coast to Long Beach Harbor.

However, MSC claims that maritime experts have thoroughly investigated and reconstructed events that led up to the oil spill.

These experts concluded that the MSC DANIT was not responsible for the oil spill, that the vessel maneuvered safely, and that Amplify simply failed to properly maintain and inspect the pipeline.  

The company noted that MSC DANIT was communicating with the U.S. Coast Guard and authorities in the Port of Los Angeles/Long Beach on the date when claimants allege the pipeline was first damaged some nine months prior to the oil spill.

Experts have further concluded that it was reasonable for the MSC DANIT to believe it had not been involved in a marine casualty reportable to the Coast Guard.

Nonetheless, MSC maintains that the responsibility for the October 2021 oil spill lies with Amplify, which pled guilty to criminal negligence for its role and ensuing damages stemming from the oil spill. 

“Yet, Amplify’s decision to plead guilty to criminal negligence for this preventable oil spill only further corroborates expert findings that Amplify failed to take reasonable steps to detect latent damage and protect the environment from leakage from its pipeline,” MSC stated.

The company also highlighted that it will continue to demonstrate in the remaining legal proceedings with Amplify’s insurers that its ship was not responsible for the October 2021 oil spill, that its vessel maneuvered correctly, and that the ultimate responsibility lies with Amplify. 

“Despite becoming aware of increased marine traffic and associated risks in 2020, Amplify took insufficient measures to protect the pipeline which was under its management and control and greatly exacerbated the situation by failing to properly respond to eight separate leak detection alarms on the day of the rupture, thus spreading the environmental pollution by magnitudes,” the company concluded.