Oil Rig Moored to Sea Floor is not a Maritime “Vessel”

August 14, 2014

Has No Practical Possibility for Transportation on Water–

You would think that by now the maritime industry would know what a “vessel” means since vessels are involved in most maritime case and are the basis for Admiralty Jurisdiction. The latest dispute reached the Fifth Circuit Court of Appeals, and the issue was whether a floating oil and gas production facility moored to the sea floor is a “vessel” subject to the Maritime Liens Act.

A company that supplied tools and services to an oil rig brought an in rem suit against the facility after the owner declared bankruptcy and had not paid the plaintiff’s bills. The supplier sought declaratory judgment that the moored facility was a maritime vessel and could be sued in rem under admiralty jurisdiction and a lien obtained against it to satisfy the bills unpaid by the owner.

The U.S. Maritime Liens Act states that a person providing necessaries to a “vessel” has a maritime lien and may file a civil action in rem to enforce the lien. A vessel is defined as “every description of watercraft or any other contrivance used, or capable of being used, as a means of transportation, regardless of its primary purpose or state of transit at a particular moment.” The appellate court said the dispositive question was, “Whether the watercraft’s use as a means of transportation on water is a practical possibility or merely a theoretical one.” The Court agreed with the District judge that the floating facility did not constitute a “vessel” for Admiralty jurisdiction.

First, the facility was moored to the sea floor by 12 chain mooring lines connected to 12 anchor piles, each weighing 170 tons, and each embedded more than 200 feet in the sea floor, and  it had an oil and gas infrastructure. It was permanently moored and otherwise practically incapable of maritime transportation in any meaningful sense.

Second, the platform had not been moved since it was constructed and installed in its present location.

Third, the platform had no means of self-propulsion, aside from repositioning itself within a 200- foot range by manipulating its mooring lines.

Fourth, moving the platform would require about 12 months of preparation and at least 15 weeks for its execution and cost $70 to $80 million.

The Court concluded that the platform “is not practically capable of transportation on water,” and, as a matter of law, not a maritime “vessel.” Warrior Energy Services Corp. et al v. ATP TITAN N/V et al. (5th Cir. Jan. 6, 2014).