A construction company was contracted to move and erect a drilling rig owned and operated by a land drilling contractor. During the erection of the drilling rig the construction company dropped a section of the derrick causing damage to the derrick, substructure and one electrical house. This resulted in loss of dayrate and repair cost to the drilling rig. The construction company was sued for $3,261,372 in addition to payments made by its insurance company. The drilling contractor elected to build a new substructure and derrick versus repairing the damaged equipment. Review of the invoices and other documentation confirmed that other rig enhancements, in the amount of $1,100,000, were done at the same time which increased the capability of the rig including the depth it could drill laterally and as well as its efficiency. These enhancements increased the marketability of the rig. The $1,100,000 enhancements was included in the $3,261,372 asked for by the drilling contractor and was not associated with the original damage to the rig. The case was settled out of court.
An employee of a welding company was injured while assisting a welder make repairs to a dump line associated with the oil and gas processing system on an oil company’s offshore platform. During the welding of the line an explosion occurred injuring the plaintiff. The oil company had contracted a third party offshore operating company to operate its offshore platform where the accident occurred. It was determined that prior to welding the line the operating company’s supervisor failed to properly of survey the job and lockout valves associated with the line being repaired prior to the commencement of repairs. This resulted in not properly isolating certain valves and piping associated with the production system allowing hydrocarbons to accumulate at the welding site. The offshore operating company was contractually was responsible for operating the oil companies platform. Both the welding company and the offshore operating company were working under the oil company’s Master Service agreement which included safety regulation specifically requiring the lockout of valves, venting of lines and a survey ensuring that the work area was safe prior to performing welding operations. The case was settled out of court.