Platform owner involved in previous offshore accidents, regulators say

Mariner Energy, which owns the platform that erupted in flames Thursday, has been involved in more than a dozen offshore accidents in the Gulf of Mexico in the last four years, including at least four fires and a well blowout, according to federal regulators.

In one of those accidents aboard the oil and gas platform known as Vermilion Block 380, which seriously injured a worker in 2008, federal inspectors highlighted "unsafe workmanlike operations," according to federal Bureau of Ocean Energy Management, Regulation and Enforcement records.

This summer, the Houston-based Mariner paid $55,000 in fines stemming from inspections that turned up various safety violations. Four of Mariner's accidents resulted in worker injuries; two of them involved fires, according to federal records.

Still, the company's safety record does not rank it among the gulf's worst operators, but underscores the inherent dangers of offshore energy prospecting and production: The tiniest spark can result in a catastrophic fire or explosion.

For example, a Mariner production platform caught fire in June 2009 after a methanol tank exploded during a welding operation. A fire on another Mariner platform broke out the year before during a routine cleaning operation.

The production platform involved in Thursday's fire was set in about 340 feet of water about 102 miles off Louisiana. On average, it produced about 9 million cubic feet of natural gas, and 1,400 barrels of oil and condensate a day, according to the company.

Mariner Energy is considered to be a small- to mid-sized independent offshore exploration and production firm, but one that was growing rapidly in recent years and showed a lot of promise, said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University.

"They've had a fair amount of success, particularly in the deep water in the gulf," Bullock said.

That success came after Mariner clawed its way back from the brink of dissolution in the early 2000s, when former energy giant Enron owned 96% of the Houston-based firm. A group of private equity investors bought it out of the Enron bankruptcy in 2004.

Two years later, using a complicated transaction and bolstered by Gulf of Mexico assets acquired from rival Forest Oil Corp., Mariner went public.

"Mariner's story is kind of like the Yellow Brick Road: It starts out OK, it gets bad pretty fast, but it turns out well in the end," Scott D. Josey, Mariner's chairman and CEO, reportedly told attendees at a Houston Producers' Forum luncheon in 2006.

Since then, Mariner has acquired more than 240 government leases in the shallow-water gulf shelf and interest in more than 185,000 acres, primarily in the Permian Basin and the gulf coast, according to the company website.

But what set the company apart from its peers was something it didn't have the money to develop: 100 lease blocks in the Gulf of Mexico's deeper waters. This year, analysts with Jefferies & Co. told investors in a research report that this portfolio of deep-water assets made Mariner somewhat "unique" in the energy industry.

It grabbed the attention of Apache Corp., a Houston-based petroleum company known for growing through acquisition. Over the last decade, the firm has been expanding its portfolio by buying properties from leading oil companies such as BP, Exxon Mobile Corp. and Royal Dutch Shell.

A week before the BP oil spill, Mariner and Apache announced plans to merge. Apache has 3,500 employees worldwide. Mariner has 328.

Apache spokesman Robert Dye said the company was "monitoring the situation closely. We're still trying to see what sort of damage has happened out there, and if there were any hydrocarbons that were spilled."

As of 2008, Vermilion 380 was Mariner Energy's "largest field in the Gulf of Mexico Shelf by reserves," according to the company's 2008 annual report. The field, which consisted of 50% oil and 50% natural gas, was large enough and robust enough to persuade Mariner Energy to drive several wells into it.

The facility was in operation as of the last week of August, Mariner said in a statement Thursday.

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