Diamond Offshore Drilling: Disaster Recovery Post-Hurricane Katrina

This case study analyzes the impact of Hurricane Katrina on Diamond Offshore Drilling, Inc., a major offshore petroleum drilling company. The hurricane caused significant damage, including the breaking free of drilling rigs and substantial financial losses. The company had implemented contingency plans and shutdown procedures based on previous experiences, but the short interval between hurricanes compounded the challenges. Key lessons learned include the importance of robust disaster recovery planning, creative problem-solving, regular disaster drills, and effective communication systems. Financial institutions need to prepare for unexpected problems and categorize risks based on their potential impact. The study highlights the necessity of preparedness and continuous improvement in disaster management strategies for organizations operating in high-risk environments.

Running head: HURRICANE KATRINA AND ITS EFFECTS ON ORGANIZATIONS 1
Hurricane Katrina and Its Effects on Organizations
Student
Institution

HURRICANE KATRINA AND ITS EFFECTS ON ORGANIZATIONS 2
Diamond Offshore Drilling, Inc
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

HURRICANE KATRINA AND ITS EFFECTS ON ORGANIZATIONS 3
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

HURRICANE KATRINA AND ITS EFFECTS ON ORGANIZATIONS 4
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.

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References
Connole, P. (2011). Long Term Care Providers Tackle Disaster Preparedness In A Post-Katrina
World. Provider Magazine.
Nina, R. (2005). Industry Assesses Hurricane Katrina's Impact. Oil and Gas Journal Online.
Whitman, M. E., Mattord, H. J., & Green, A. (2014). Principles pf Incident Response and
Disaster Recover. Second Edition. Course Technology, Cengage Learning.
Zernov, V. (2014). Diamonds Offshore Drilling: Expectations for 2018. The Wallet Street Journal, 1-10.