Black Gold Texas Tea

Texas is proud that the Lone Star State is our nation’s leader for oil production, accounting for 41.4% of the nation’s output.? But did you know that Texas, alongside Louisiana and California, are responsible for over 50% of the United States oil refining?? It’s clear as mud that Texas keeps our economy pumping.

Currently there are 371 drilling rigs in Texas, augmented by 740 land and 700 offshore rigs in operation nationwide.? Relevant to our industry, the cost to construct a standard land rig ranges from $14 to $25 million, while offshore rigs can require a hefty investment between $20 million to $1 billion. From oil rigs to production to point of sale, the intricate web of pipelines, spanning over 190,000 miles from the Gulf of Mexico throughout North America facilitates the transportation of liquid petroleum.? The estimated investment 2021 to 2030 is $650 billion and an additional $700 billion through 2050 – fueling our industry for a few more decades.

By-products also leak into unexpected industries including pharmaceuticals and healthcare, fertilizers and pesticides, detergents and solvents, artificial scents and perfumes.? Within the construction industry these by-products impact steel and aluminum, asphalt and tar, roofing materials, water pipes, caulk, paint and sealing products, linoleum, plastic “wood,” rubber cement, bearing grease and safety glasses.

Upstream, midstream, downstream – one thing we know about oil production is always expect the unexpected.? So, keep calm and drill on!

SOCOTEC experts will be at the upcoming Texas Bar 37th Annual Construction Law Conference in San Antonio.? We eagerly anticipate listening, learning and sharing insights in Construction Law and deepening the understanding of how oil and gas (and other forms of energy), continue to power our industry – and the world.

Best Wishes, Silvia Zurita and Amy Phillips

PIPELINE PERFORMANCE

SOCOTEC was engaged to assist the owner, an investment consortium, on the construction of a new major pipeline (two 42-inch gas lines), running from West Virginia through Ohio up to Michigan.

Throughout the project we monitored costs and schedule, and assisted the owner in evaluating all change orders and scope increases for entitlement and cost.

Our team consisted of six people in the field monitoring construction during the project and four more people auditing all the invoices submitted by the contractors.? As part of this effort, we identified $24 million inappropriate billings, which were credited back from the contractor to the owner.

When the project was complete, one of the contractor’s asserted claims against the owner for an additional $63 million. We provided testimony at trial and limited the claim to $1.3 million while recovering $14 million in our counterclaim.

OIL & GAS | PETROLEUM

Etymology Ancient Greek “petra” (rock) and “élaion” (oil)

3000 BC Oil used in medicine 400 BC China first drilled oil wells

900 AD Persia distilled oil to kerosene

1853 Poland first modern oil well

1866 Adopted 42-gallon barrel

A barrel or tierce = 300 pounds

Crude Oil Mother of all Commodities Texas’ most productive oil fields:

East Texas Oil Field

Permian Basin

2050 Peak Oil

And . . .1901 American Oil Boom Began IN TEXAS! Spindletop near Beaumont

Written by:?

BRADFORD L BRIGHT CCA CCP

Brad Bright is a Senior Principal in the Dallas office of SOCOTEC formerly known as Veritas Advisory Group, Inc. Mr. Bright specializes in construction and government contract disputes including analysis of delay, disruption, and resultant damages. Mr. Bright has forty years’ experience in consulting, construction, construction management, construction accounting, and auditing. Within the construction industry, Mr. Bright has consulted on such issues as delay, disruption, proper construction management, defective work, contract terminations, surety bond claims, general accounting, and damages.

Mr. Bright has evaluated and rendered opinions regarding generally accepted industry practices with regard to general contractors, subcontractors, surety investigation activities, supplementation, and termination events.

These engagements have encompassed a wide variety of projects including, power plants, pipeline construction, petrochemical facilities, sports arenas, prisons, hospitals, wastewater treatment plants, road construction, hotels, and high-rise office buildings. Mr. Bright has provided expert testimony as well as prepared numerous written reports and materials to present findings for the purposes of mediation, arbitration, and litigation.

Mr. Bright has also consulted on a wide variety of Federal Government projects involving the Army Corps of Engineers, Veterans Administration, General Services Administration, Federal Aviation Administration, and the Department of Energy. Mr. Bright has provided claims analysis and claims preparation services as well as Terminations for Convenience Settlement proposals.

EDUCATION

Master of Business Administration University of Dallas - 1984

Bachelor of Science

Construction Engineering

Pittsburg State University – 1980

PRACTICE AREAS

Dispute Resolution

Project Advisory

Expert Witness Testimony

ABOUT SOCOTEC

SOCOTEC is a leading trusted partner in its class providing high-value technical and specialized construction, architectural, engineering, and financial advisory services. Our team of professionals assist companies along the project life cycle across multiple industry sectors. SOCOTEC helps to optimize the performance of built services by mitigating and managing the risks and challenges inherent in the day-to-day activities.

SOCOTEC, with over 500 professionals in more than 25 offices in the U.S., is an industry leader in the building and infrastructure sectors, offering the combined highly technical expertise of an expansive and holistic network of experts across six service lines:

(i)??????????? Building Envelope;

(ii)?????????? Energy & Sustainability;

(iii)????????? Code & Planning;

(iv)????????? Life Safety;

(i)??????????? Project Advisory;

(ii)?????????? Dispute Resolution; and

(iii)????????? Specialty Engineering.

SOCOTEC Group, a leader in construction inspection and a major player in Testing, Inspection amp; Certification (TIC) for the construction and infrastructure sectors, the SOCOTEC Group has 200,000 clients with operations in 26 countries, 11,300 employees and over 250 external recognitions. The SOCOTEC Group has established 7 major international platforms: France, UK, Germany, Italy, Netherlands, Spain, and the US, servicing a diversified client base of more than 200,000 customers.

www.socotec.us

John Bailey Lisa Buck Shel Harrison Mark Landrum Ken Monson Alex Moore Alan Nagorzanski, PE, CMA April Parrish, CCA Cameron Poth, CPA, CFF Sarah Rommelmann, PSP James West

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