Derrick Love, 34, from Tayside, died instantly when he was hit by a heavy piece of equipment, known as a mandrel unit, while working on MSV Seawell - a well-intervention vessel - in the Shell Gannet Field 100 miles off the coast of Aberdeen.

He was helping to hoist the 600lb piece of metal above deck using an incorrect line when the wire rope snapped and fell 12 metres on top of him.

Mr Love, a deck operator working for Aberdeen-based TDM International, was carrying out wireline operations when the tragedy happened on 20 February last year.

He was dropping tools in and out of an oil well just weeks after the company was issued with an improvement notice with warnings to tighten up safety procedures.

Fiscal Ernest Barbour, prosecuting, said: "The fatal accident was foreseeable and could have been prevented with a risk assessment in place."

The MSV Seawell is owned by Aberdeen-based company Well Ops (UK), formally known as Cal Dive International - which was carrying out work for Shell. The firm admitted breaching health and safety regulations when it appeared at Aberdeen Sheriff Court.

Bruce Craig, the company's solicitor accepted that the procedure in place for raising and lowering the mandrel and toolstring assembly was not safe, but claimed it was common practice in the industry and there had never been a problem before.

Mr Craig said: "The company regrets the death of Derrick Love and expresses deepest sympathy to his family and all those affected. He was a highly regarded member of staff and was very well-liked and respected by all who knew him.

"It is accepted that the system in place was not sufficiently safe, but a full review of the company's safety systems has now been carried out and a written risk assessment put in place."

The court heard that Well Ops, which made a profit of more than £100 million according to its latest accounts, had paid the £116,000 cost of the Health and Safety Executive's investigation and set up a trust fund for the Mr Love's son.

Passing sentence, Sheriff Graeme Buchanan said: "This was a tragic case and I have to take account of the fact a death occurred as a result of the company's failures with their obligation in matters of health and safety.

"I accept the practice was widespread throughout the industry, but it is clear it was not very difficult to devise measures which would make the procedure safer to ensure an accident of this kind is less likely to happen again."

However, an offshore oil union said fines did little to deter health and safety breaches by wealthy oil firms.

Jake Molloy, the OILC general secretary, said: "I don't think fines are a real deterrent to bad practice, especially when many of them are earning as much as £1 million to £2 million an hour.

"The offshore industry has one of the highest accident rates of any industry and there must be more innovative ways to deal with companies flouting health and safety laws."