Rowan Companies Inc., pursuant to a plea agreement with the Department of Justice (DOJ), last Tuesday pleaded guilty to three felony counts in a federal court in Beaumont, TX, in connection with the dumping of oil and other pollutants into the Gulf of Mexico by supervisory workers on its Rowan-Midland drilling rig during the period from 2002 through 2004.

In U.S. District Court for the Eastern District of Texas, the Houston-based oil and gas driller was assessed $9 million in fines and environmental fund payments for violating the federal Clean Water Act and the Act to Prevent Pollution from Ships. As part of the plea agreement, Rowan will be subject to unsupervised probation for two years, during which time the company has agreed not to commit further violations of federal, state or local laws or regulations.

Six Rowan workers, two former employees and one retired employee, who were members of the Rowan-Midland crew between 2002 and 2004, also entered individual pleas in connection with the investigation, the company said. Eight were fined either $2,500 or $5,000, but one faces a fine of up to $250,000. The plea agreement and guilty pleas are subject to approval by the district court.

In anticipation of the court payments, Rowan said the $9 million was recognized as a charge to the company's fourth quarter earnings in 2006. It further noted that it sold the Rowan-Midland drilling rig in January of this year.

"We will continue to use every available resource to prosecute these crimes which compromise our environment and our safety, including criminal fines and penalties," said U.S. Attorney John Ratcliffe for the Eastern District of Texas. "I am particularly pleased that part of the fines will go directly to the future protection and preservation of the Gulf of Mexico and the Texas and Louisiana coastline," he noted.

"The defendants sentenced today used the Gulf of Mexico as a dumping ground for oil and other waste," said Granta Nakayama, assistant administrator for the Environmental Protection Agency's enforcement and compliance assurance program.

The government's investigation revealed that between 2002 and 2004 employees on the Rowan-Midland routinely discharged waste hydraulic oil mixed with water, used paint, paint cans and other pollutants and garbage into the Gulf and failed to notify the federal government, the DOJ said.

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