Whiting Petroleum Corp (NYSE:WLL) Being Investigated For Faulty Classification While Transporting Crude

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Dallas, Texas 02/06/2014 (FINANCIALSTRENDS) – Whiting Petroleum Corp (NYSE:WLL) seems to have run foul with the oil industry regulators in U.S, if the latest notices sent out by U.S. Department of Transportation is anything to go by.  The national transport regulator has let it be known that it has sent out notices to three oil producing firms located in the North Dakota area, seeking their response on allegations of wrongly classifying crude oil produced in the Bakken region while they were being transported to processing units. The regulator has cited 17 shipments which are suspected to fall under these faulty classifications.

If the allegations are found to be true after investigations, the three oil firms “Hess Corp., Marathon Oil Co. and Whiting Oil and Gas Corp” will collectively be fined close to $93,000. The three companies in question including Whiting Petroleum Corp (NYSE:WLL) have sought more time to respond as they continue to investigate and review the allegations made by the U.S. Department of Transportation.

U.S. Department of Transportation notices to the three oil firms stem from the series of raids and inspections that the Pipeline and Hazardous Materials Safety Administration had launched under a classified operation called “Operation Classification” to test out the crude oil being transported under the guise of Bakken originating crude. The violations the fact that the oil firms had assigned a wrong packing code to the oil being transported via the pipelines. The packing code pertains to the levels of toxicity and health hazard posed by the materials being shipped.

Making its case against the three offending oil producers PHMSA in a press note has explained that, “Proper classification will ensure that the material is placed in the proper package and that the risk is accurately communicated to emergency responders. Shipping crude oil – or any hazardous material – without proper testing and classification could result in material being shipped in containers that are not designed to safely store it, or could lead first responders to follow the wrong protocol when responding to a spill.”