"Lost in Hole" lawsuit thrown out

Photo: Jeff Mayers
Photo: Jeff Mayers

A HIGH court judge has dismissed a $5.4 million claim by an oil services company and a contractor after a logging tool got lost in an oil well.

Justice Frank Seepersad today dismissed the “lost in hole” lawsuit of Tucker Energy Services of Princess Margaret Street, San Fernando, against TN Ramnauth and Company, based in Penal.

Tucker Energy claimed US$803,577.77 for the replacement of a wire logging tool which got lost in one of TN Ramunath’s oil wells in 2015.

The judge delivered his ruling in the San Fernando Supreme Court. Tucker Energy was represented by attorneys Catherine Ramnarine and Cherie Gopie while TN Ramnauth was represented by Jagdeo Singh, Kiel Taklalsingh and Karina Singh.

At the trial, Tucker Energy relied on “Lost in Hole” clause of the contract with TN Ramnauth, which stated that tools which became “lost in hole” must be replaced by the drilling company.

TN Ramnauth’s attorneys disputed this, saying Tucker Energy’s interpretation of the clause was too narrow and made no commercial sense.

In his ruling, Seepersad said it was evident that both parties appreciated that the tool may have been during the logging process and Tucker Energy had pre-existing protocols to mitigate against situations of sticking, as well as the retrieval of a stuck tool.

He said the protocols were not fully engaged when the tool became stuck, and based on the evidence presented to him, he was not satisfied that a competent fishing exercise was engaged, which, he said, should have been done as a pre-requisite for liability under the “Lost In Hole” clause.

“A proficient fishing exercise should have been engaged as a pre-requisite for liability to attach under the “Lost in hole” clause as any contrary circumstance would not accord with commercial sense and would lead to a circumstance of potential abuse, as drilling companies would be at the mercy of logging companies, who do not have any incentive to attempt to retrieve their stuck tool, confident in the knowledge that the drilling company, as a matter of strict liability would be required to compensate them.”

Seepersad said Tucker Energy was contractually engaged to carry out the logging process and then to fish out the tool. He said neither process was properly supervised and when the tool became struck, the fishing exercise was not conducted with the skill and expertise required.

Seepersad also dismissed a counter-claim filed by TN Ramnauth for compensation for loss of reserves.

The ruling would be significant for the energy and hydrocarbon exploration sector as the case was the first of its kind filed in the local courts.

According to Tucker Energy, a logging tool is lowered at the end of a wireline into an oil well, in order to make a detailed record of the geological formations within the well. Tucker Energy provided the tool and carried out three logging jobs for the latter company on three wells in April 2015.

Tucker Energy contended that it was an express term of the agreement that in the event any of its logging tools being “lost in the hole” or damaged beyond repair, TN Ramnauth would be responsible for the cost of any “fishing” operations to retrieve the tools or replacement costs, including shipping and transport cost.

Tucker Energy explained that “lost in hole” is a common industrial term which refers to tools being lost, damaged, or left in the well during the logging process. Tucker Energy said it performed the service for TN Ramnauth diligently and in accordance with standard practice.

However, the logging tool became lost in the hole, and said TN Ramnauth refused to pay for it.

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""Lost in Hole" lawsuit thrown out"

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