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Oil platform blaze off Louisiana leaves workers missing

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Rescue crew surrounds an oil platform which exploded early this morning in the Gulf of Mexico, off the coast of Louisiana, November 16, 2012. REUTERS/Sean Gardner
Rescue crew surrounds an oil platform which exploded early this morning in the Gulf of Mexico, off the coast of Louisiana, November 16, 2012. REUTERS/Sean Gardner

By Kristen Hays and Joshua Schneyer

HOUSTON/NEW YORK (Reuters) - An oil platform in the Gulf of Mexico and operated by Houston-based Black Elk Energy burst into flames on Friday, leaving at least two people missing and badly injuring several others, U.S. and Louisiana officials said.

The fire has been extinguished, Black Elk spokeswoman Leslie Hoffman said. She said an emergency response is under way, but declined further comment, saying the company will issue a statement later Friday.

The U.S. Coast Guard said 11 people were airlifted to hospitals while nine others were evacuated to other nearby energy facilities. Search and rescue helicopters were scouring the area, located around 17 miles south of Grand Isle, Louisiana.

No fatalities have been confirmed but two workers are missing. The 11 hurt included four who suffered burns and were in critical condition at Louisiana's West Jefferson Medical Center, a hospital spokeswoman said.

When it caught fire, 22 workers were aboard the shallow-water platform, which was not actively drilling or producing oil and gas, the Coast Guard said.

An oil sheen is being monitored in waters nearby. The Coast Guard said there appeared to be little risk of a major oil spill because production was shut off before the fire, and Black Elk told authorities that any spill could be as little as 28 gallons.

The latest potentially deadly offshore incident comes a day after oil giant BP Plc reached an agreement to pay record penalties of $4.5 billion for its role in the 2010 Deepwater Horizon disaster, which spewed 4.9 million barrels of oil into the Gulf of Mexico and killed 11 workers.

The Black Elk platform sits in 56 feet of water and its production apparatus was shut off before the fire. In contrast, the BP disaster happened during a drilling operation in waters nearly a mile deep.

Federal data and SEC filings show that Black Elk, a minor producer in the Gulf, has a recent history of close calls, platform incidents and fines, including a $300,000 federal penalty it paid in September.

Friday's incident could reignite a national debate over safety standards for offshore drilling. After the Horizon spill, the government overhauled offshore drilling regulations and imposed a ban on drilling that lasted for several months.

"BP and the government may have settled criminal matters yesterday, but today's incident shows that increasing safety of offshore drilling and for hard-working men and women is still not a settled matter," said Massachusetts congressman Ed Markey, the ranking Democrat on the House National Resources Committee, in a statement.

"This incident raises a number of questions about the nature and adequacy of safety measures on this offshore rig," Markey added.

The federal Bureau of Safety and Environmental Enforcement (BSEE) said it was sending safety inspectors to the Black Elk platform.

"They were not actively drilling," said Coast Guard spokesman Glenn Sanchez. "They were cutting a pipe or doing some type of maintenance that may have resulted in the explosion and fire."

A HISTORY OF CLOSE CALLS, FINES

Offshore producer Black Elk was founded in 2007 by CEO John Hoffman, a former BP Amoco executive, according to an interview with him published in the Houston Business Journal in April.

The firm holds at least 88 oil and gas leases, according to U.S. government data. Its SEC filings show Black Elk pumped some 14,000 barrels of oil and natural gas equivalent per day last quarter.

It recently announced a major expansion, with plans to drill 23 new wells in the Gulf of Mexico starting this month, according to a company website.

In a company filing, Black Elk lists New York hedge fund Platinum Partners Value Arbitrage Fund as its majority equity owner. Platinum declined comment.

Government data and company filings show that Black Elk has a recent history of fines and safety issues on offshore rigs.

The firm was investigated by BSEE as recently as August for an incident in which two employees were dropped 60 feet into Gulf of Mexico waters due to a crane malfunction. No injuries were reported.

In September, while repairing a leak at another well on a platform in the High Island area of the Gulf of Mexico in September, workers were forced to activate a blowout preventer to control the well. Regulators ordered the well to be plugged and abandoned last month.

SEC filings also show that Black Elk paid a $300,000 civil fine in September, related to a site inspection in 2011 of one of its facilities, which revealed compliance issues. A small fire occurred at a Black Elk platform in February of 2011 in the Gulf of Mexico, but was quickly contained, according to a report filed with the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, a predecessor of BSEE.

Black Elk specializes in acquiring mature oil and gas properties from other companies, according to a July report in the magazine Hedge Funds Review, which says it has spent $600 million on wells since 2009.

(Reporting By Kristen Hays, Joshua Schneyer, Scott DiSavino, Matthew Robinson, David Sheppard, Anna Driver, Roberta Rampton, Robert Campbell, Selam Gebrekidan, Edward McAllister, Robert Gibbons, Cezary Podkul and Jeanine Prezioso; Editing by Gerald E. McCormick, David Gregorio and Bob Burgdorfer)

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