Alaska oil company fined record $10 M

An Alaska oil company has agreed to a record $10 million fine for violation of the Jones Act, for using a foreign flagged vessel to transport a jack-up rig to Alaska without first acquiring the required federal waiver.

Acting U.S. Attorney for Alaska Bryan Schroder said Aug. 4 that Furie Operating Alaska LLC, whose focus is exploration and production of natural gas and oil in Cook Inlet, has agreed to pay $10 million to satisfy a civil penalty originally assessed against it by U.S. Customs and Border Protection for violating the Jones Act.

The settlement is the largest Jones Act penalty in the history of the act, according to Schroder. Resolution of this case demonstrates that the Jones Act will be actively enforced and that an intentional violation will not be rewarded, he said.

Furie was penalized for transporting the Spartan 151 jack-up drill rig from the Gulf of Mexico to Alaska in 2011 using a foreign flagged vessel without acquiring a waiver of the Jones Act from the Secretary of Homeland Security.

The settlement resolves a civil lawsuit filed by Furie in 2012 challenging the assessment of the civil penalty.

The Jones Act, in effect since 1920, prohibits a foreign vessel from transporting merchandise between points in the U.S.


Violating the act may result in the assessment of a civil penalty equal to the value of the merchandise. A waiver may be obtained, in limited, circumstances, from Homeland Security, if it is believed it is in the interest of national defense, following a determination that there is no U.S. vessel available to do the transport.