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.
More From Zacks.com
- Investment & Company Information
- ExxonMobil Corporation