Hurricane Katrina on Diamond Offshore Drilling
It is an offshore public petroleum drilling company which started in May 1953 by Alden J. larbode in New Orleans (Zernov, 2014). The company has headquarters in Houston, Texas. Its major offices are found in Australia, Brazil, Mexico, Singapore, Scotland, and Norway. It currently operates 17 drilling rigs which include 13 semi-submersible platforms and four drill ships. It is now the leading company in deep water drilling worldwide. As of 2017, the company had a net income of $18 million, total assets $6.250 billion and total equity of $3.774 billion. It is majorly owned by Loews Corporation (53%). As of 2017, it had 2,400 employees. Diamond Offshore Drilling, Inc’s website is diamondoffshore.com.
How was the organization impacted? What losses did it suffer?
Safety is the primary scale through which organizations or individuals measure their operational success. When the Katrina Hurricane hit the shore, Diamond Offshore Drilling Company was negatively affected. It suffered several losses. Some of them include; breaking free of the semi-submersible drilling rig ocean Voyager from its moorings on Mississippi Canyon Block 711 (Nina, 2005). It drifted nine miles away from its original position before the storm. Diamond Offshore’s Ocean Warwick was also damaged severely after the wind made it move twelve miles away from Louisiana off water on the main pass Block 299.
Describe the disaster recovery and business continuity that the business had in place?
When the Hurricane Ivan tracked through a high density corridor of Oil and Gas infrastructure in 2004 at the Gulf of Mexico, the Minerals Management Service of the Department of the Interior commissioned a study to record the effects of the Hurricane. The main agenda for the research was to gather and analyze information on having stationary drilling units. This study relied a lot on the meteorological department. Out of this study, Diamonds Offshore Drilling Company laid down contingency plans and shutdown procedures to help it in case of a future hurricane (Whitman, Mattord, & Green, 2014). The contingency plan was laid to safeguard oil spillage and environmental damages. It was to help the organization to efficiently respond to any significant future disaster that was to happen. Proper planning is the key to a successful plant shut down. Diamond Offshore Drilling Inc had in place valve maintenance planning, equipment for spare and maintenance and a real time project process to follow up in case of a disaster. During their maintenance after the last hurricane before the Katrina Hurricane, Diamond Offshore Drilling Inc had ensured the reliability of the valves for the subsequent several years. Any possible delays were minimized to stay on the schedule as well as securing a smooth change to regular production and productivity recovery as soon as possible after any disaster. Due to the shorter period between the two subsequent hurricanes compounded everything making Diamond Offshore Drilling Inc to be profoundly affected by the Katrina Hurricane.
What were the Lessons Learned?
Such a massive disaster like the Hurricane Katrina demand financial institutions to implement their planning on how to recover from such disasters. Financial institutions should also improvise some creative solutions which will help them to curb unexpected problems quickly (Connole, 2011). One cannot prevent a disaster, what is required is to be prepared and practice for an emergency. This is possible through identification of potential threats, assessing their likely impacts and developing responsive plans. This helps one to categorize risks from high to low about their occurrence possibility. Disaster drills should also be exercised to measure how prepared an organization or individual is prepared in case such a disaster occurs. It is important however to realize that drills should be by the specific location in consideration of some factors such as infrastructure and population. Good communication systems need to be put in place at every place of work. This will help to access employees during or after a disaster and know their whereabouts.