MSC reaches settlement deal with Amplify’s subrogated insurers

Container shipping major MSC Mediterranean Shipping Company has entered into a settlement agreement with the subrogated insurers of Amplify Energy Corp related to the 2021 Orange County oil spill incident.

The oil spill resulted in the discharge of approximately 25,000 gallons of crude oil in October 2021 during an offshore leak in the 17-mile-long San Pedro Bay Pipeline.

The company said that the settlement amount will be jointly funded by MSC and Costamare without admission of responsibility or liability for the environmental damage that took place.

MSC insisted that the damage occurred due to Amplify’s ‘negligent management of their underwater pipeline.’

“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. MSC agreed to this settlement to move forward productively, and we hope this regrettable incident will encourage Amplify to recognize its responsibility as a marine operator in the waters of California,” MSC said in a statement.

To remind, MSC has been identified as the party of interest in the local investigation after its boxship MSC Danit dragged anchor near the underwater pipeline in January 2021. Another container shipping vessel was identified as dragging anchor in the area at the time, COSCO Beijing, which is operated by Costamare Shipping Co, during severe weather.

Amplify, owner of the pipeline, sued the two containership operators and Marine Exchange of Southern California claiming it failed to direct the ships to deeper waters and failing to inform Amplify of the anchor-dragging incidents.

Nevertheless, in August 2022, the U.S. Justice Department said that Houston-based Amplify Energy Corp., and its wholly-owned subsidiaries Beta Operating and San Pedro Bay Pipeline, agreed to plead guilty to violating the federal Clean Water Act, pay a $7.1 million criminal fine, and compensate federal programs approximately $5.8 million in connection with the spill.

This is the third settlement MSC revealed since the beginning of this year. In February, MSC and Costamare agreed to a settlement and payment of a total of $45 million that would go to Southern Californian fishermen, tour companies, and property owners who launched a lawsuit after the spill.

Last month, MSC inked a settlement deal with Amplify Energy Corp. and its affiliated entities in connection with the 2021 Orange County pipeline oil spill.