Buccaneer counter-sues Archer Drilling for $30 million

• Lawsuit lays claims for lost drilling work and delays, and withholding certification documents
By Naomi Klouda
Homer Tribune

Jack-up Rig Endeavour

Jack-up Rig Endeavour

Buccaneer filed a lawsuit in Texas District Court Monday against Archer Drilling that asks for $30 million in damages or lost income due to the actions of its contractor.
Current delays in achieving certifications are also to be blamed on Archer, the suit says, because they continue to withhold crucial documents proving what work was done on the jack up rig Endeavour.
Archer Drilling was hired by Kenai Offshore in October 2011 under a Master Services Agreement to provide project management for the modifications and repairs on the Endeavour Jack up rig. While the $68 million jack up was in a Singapore shipyard, Archer was charged with overseeing repairs and retrofitting it for work in arctic conditions. The rig arrived in Homer Aug. 26 with a supposedly “short list” of work to complete. The list grew to 10 pages, Buccaneer says in its lawsuit, some of it work Archer claimed to have completed at the shipyard.
In December, Archer walked off the job and filed a lawsuit asking for $6 million in unpaid bills. By then, the jack up rig had remained at the Homer Deep Water Dock for four months.
The counterclaim in the District Court, Harris County Texas against Archer Drilling claims fraud, and lost contracts due to the damages sustained by Buccaneer and its subsidiary Kenai Drilling, LLC. Delays at the Homer dock resulted in millions of dollars of damage, including the $30 million in lost revenue Buccaneer calculates due to the inability to undertake drilling operations in Cook Inlet.
Kenai Offshore is in the process of preparing its own counterclaim against Archer Drilling for damages, Buccaneer director Dean Gallegos said in a prepared statement.
Under the management contract, Archer was charged with project management, project engineering, risk assessment, change management, procurement control, project planning/reporting and had the responsibility for documentation as required by regulatory agencies.
When Archer terminated the contract, all the employees and managers walked off the job and they took documents with them, the lawsuit alleges. “Archer abandoned the rig, removed rig documents and certificates necessary for the vessel to be approved for operations in Alaska,” the lawsuit states. “Archer also ordered its project management personnel off the Endeavour, intentionally depriving KOV and Kenai Drilling of the institutional knowledge needed for an orderly and expeditious transition and completion of work.”
Even today, Archer continues to withhold documents “and will not surrender them until all disputed amounts are paid,” the lawsuit says. Archer was paid $3.4 million at the beginning of the contract and has now been paid all but $1.4 million of disputed debt, the suit says. KOV and KD were forced to spend millions of dollars correcting unsatisfactory work, there by paying twice over.
At some point, Archer grew vindictive and even slowed down work more, according to Buccaneer’s lawsuit. “Archer had seen the projections for the profitability of the Endeavour and its projects and pressured KD to allow it to manage drilling operations with a guaranteed profit element and further profit sharing as a component of compensation,” the suit states. Buccaneer discussed the arrangement with Archer in good faith, but upon learning the status of the work needed to get the rig certified and unhappy with Archer’s work, KD refused additional negotiations. Then, “Archer’s progress on the Endeavour, while incremental at best, slowed further.”
The lawsuit complains Buccaneer has reneged on contracts because of Archer’s delays, such as on signed for a sales contract to supply gas to Enstar and, when available, to ConocoPhillips’ LNG plant.
There’s also the role the jack up rig was to play hired out for other drilling work by signed agreement on Oct. 29, 2012. The delays caused by Archer “continue to damage KD because KD has various agreements with third parties to drill wells using the Endeavour,” the lawsuit says. “Some of those agreements require KD to drill, because if drilling is not commenced, the underlying leases may be lost.”

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Posted by on Mar 13th, 2013 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

3 Responses for “Buccaneer counter-sues Archer Drilling for $30 million”

  1. Height of arrogance says:

    The way these guys behave, it is almost like they are in the government or something.

    Everyone knows you didn’t pay contractors in Kenai, now you didn’t pay Archer and you want to blame them for damages because they protected their interests by taking their paperwork with them.

    It wasn’t Archer’s fault they couldn’t fix up the piece of cr@p in time, and since they had to fund the repairs, it is understandable that work slowed down because you didn’t pay them.

    With Buccaneer’s past history and evidence against them, they will have to take the case to the Homer court to win. Maybe put the Homer city council and the chamber of commerce members on the Jury…then you might have a chance.

    One week and that rig is out of here right? Or will the city council let Buccaneer blame Archer for the delay and tell the harbormaster stuff it?

  2. Alaska sourdough says:

    OK, lets get this straight just for the people who live here and didn’t see it coming. Seems we now have a fight going on between two oil moguls who aren’t even supposed to be in the Kachemak Bay. Are nonprofit agencies taking care of us? We have a governor who gives our money away to scoundrel’s; a Senator who works for Conoco Phillips instead of the people in the State of Alaska, a city government who bedded down cozily with Agenda 21 without knowing who they were sleeping with, a fracking situation that will soon collapse under the weight of the unjust procedures (throughout the US). Toxic chemicals kill everything from plant to animal to human and causes fires in the faucet from the water from Homer to New Orleans … and why? Somebody would rather make money than serve the people who pay them.

    Read and understand what’s happening.
    The Fracked-up USA Shale Gas Bubble
    By F. William Engdahl
    Global Research, March 13, 2013
    Url of this article:

    The gas has become quite a fishy deal. Simply, the destruction must go out of Kachemak Bay, the thieving losses go too. Sorry guys, bad gamble in Alaska. You’re accustomed to cities with a population of more than 700,000. The entire state of Alaska barely census that amount. It’s hard to get lost in the crowd here, unless you like living with moose and bear like the rest of us.

    THIEF – a person who steals another person’s property, especially by stealth and without using force or violence

  3. Stop Fracking/Buccaneer says:

    A natural gas well that malfunctioned will remain capped as regulators investigate what caused thousands of gallons of fracking fluid to flow from the drilling site in rural Wyoming County on Wednesday night into Thursday afternoon.

    State Department of Environmental Protection spokeswoman Colleen Connolly said the malfunction occurred at about 6 p.m. Wednesday and worsened overnight. At one point, she said, about 800 gallons of the chemically treated wastewater was escaping per minute.

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