MSC Mediterranean Shipping Company and Costamare have signed a settlement agreement with the subrogated insurers of Amplify Energy Corp, bringing to a close a dispute over a damaged pipe that led to an oil spill off the coast of California.
Both companies have agreed to pay damages for the 525 barrel oil spill, but continue to deny any culpability for the spill.
“The settlement amount will be jointly funded by MSC and Costamare without admission of responsibility or liability for the environmental damage that took place due to Amplify’s negligent management of their underwater pipeline,” MSC said in a statement released on Wednesday.
MSC said it agreed to the settlement to “move forward productively”, and it hoped “this regrettable incident will encourage Amplify to recognise its responsibility as a marine operator in the waters of California”.
MSC’s 14,028-teu container ship MSC Danit (built 2009) and Costamare’s 9,469-teu container ship Beijing (built 2006) have been accused of damaging the oil pipeline when they dragged their anchors across it during a storm in January 2021, about nine months before the oil spill.
MSC maintains that Amplify is solely responsible for events that led up to the oil spill and that their actions further worsened the pollution substantially.
The Swiss liner giant claims Amplify failed to act as a responsible marine operator by not taking reasonable preventative steps to better protect its pipeline despite becoming aware of increased marine traffic and activity near it, nor did it take steps to detect deficiencies within its pipeline despite becoming aware of them for months prior to the spill.
Amplify agreed in August 2022 to plead guilty to US federal criminal negligence charges and pay $13m in penalties and fines. A month later, the energy company agreed to plead no contest to six criminal charges brought against it by the State of California and pay nearly $5m in penalties and fines.
Orange County district attorney Todd Spitzer said that Amplify had repeatedly turned off the 17 mile-long pipeline when it was alerted to the leak.
These actions, MSC claims, is what led to “a preventable pollution event”.
In response to MSC’s statement issued on Wednesday, Amplify claimed the MSC Danit departed US waters without reporting its anchor drag across the pipeline, and MSC spent over a year trying to avoid responsibility for its actions.
“Rather than face a jury trial, the Mediterranean Shipping Company agreed to pay its share of hundreds of millions of dollars to resolve claims from Amplify and its insurers and California residents related to MSC’s direct role in the October 2021 oil spill off the coast of Southern California, specifically the January 2021 dragging incident where an MSC vessel repeatedly dragged its anchor over Amplify’s pipeline causing significant damage and the eventual oil release,” Amplify said in a statement sent to TradeWinds.
“In its statement, it is clear that MSC continues to point fingers. Amplify trusts that foreign shipping companies and their vessels will implement procedures that avoid their vessels from entering US waterways and causing considerable damage to property and the environment,” it added.
This article has been updated to include comment from Amplify Energy
