Energy Insurance

198 Pages·2010·13.27 MB·English

Introduction
to Energy Insurance
Gard AS, Arendal,
21 October 2010
What are the main differences between
marine and energy insurance?
Drilling into unknown underground conditions (Wildcats)
o
– High pressures
– Uncertainty when pressured zones are reached
High Risk Operations – release of hydrocarbons
o
Resourceful Assureds
o
Insured objects are stationary whilst operating
o
Tailor made items and parts with long lead time
o
High values and significant retention/deductible levels
o
”Tailor made” insurance policies – manuscript wordings
o
Low frequency but large and complex losses
o
Limited case law and market practice
o
Contents
About oil and gas operations
o
The Energy Insurance Market
o
Offshore Oil and Gas Exploration and Drilling Operations
o
Offshore Field Development
o
Offshore Production and Transport of oil and gas
o
Claims handling
o
Piper Alpha – a case study
o
About oil and gas operations
History, Players, Regulation Regimes and Offshore Oil & Gas
Theatres
Oil and Gas – the core activities
Oil, Gas and Condensates = Petroleum
o
– Petra (rock) + oleum (oil) = petroleum (rock oil)
– Fossil fuel
Three main activity categories
o
– Upstream activities (prospecting, exploration, development and
extracting/production)
– Midstream activities (transport from offshore field to marine terminal/
refinery/petrochemical plant/gas processing & transmission)
– Downstream activities (refining, petrochemical, processing,
marketing & distribution)
Oil and Gas exploration and production players
Oil and gas companies (Operator and other license holders)
o
Rig owners – mobile offshore drilling and accommodation units
o
Ship-owners – owners of floating units of production, storage
o
units, shuttle tankers, stand-by and supply vessels or heavy
lift vessels
Contractors, sub-contractors and suppliers
o
– Service companies
– Helicopter companies
– Construction and repair yards/facilities
– Equipment vendors and suppliers
Phases in the oil and gas industry
Exploration
Field Development
Production
Downstream
Decommissioning
E&P
E
xploration
&
P
roduction
Oil Field Operating Arrangements
Joint Venture (JV)
o
– Licensees or Lease Holders
Joint Operating Agreement (JOA)
o
Operator
o
Operating Committee
o
– Sub-Committees
Unitization Agreement
o
Capital Expenditure (Capex)
o
Operational Expenditure (Opex)
o
Authorization for Expenditure (AFE)
o
The role of the Field Operator
Usually the license holder with the largest participating interest
o
Duties
o
– Obligations and commitments to the government agencies
– Management, co-ordination and conduct of JV activities
– Standards of care
 Hold harmless agreement – willful misconduct and gross negligence
excepted
– Value of agreements before need to obtain non-operators approval
– Special circumstances where approval must be obtained
Contracting with service providers and vendors
o
– ”Knock for Knock” agreements