Transcript Oil and Gas Insurance

Oil and Gas Training
Lusaka April 2016
Oil and Gas Risk Exposures
Oil and gas value chain
Exploration
& Development
Hydrocarbon
Production
Shipping
Refining
& Blending
Storage
Distribution
Marketing
Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
FIRST PHASE
ACREAGE ACQUISITION
NO INSURABLE ACTIVITY AT THIS STAGE
4
Production Sharing Contract (PSC)
 Agreement between Host Nation and Foreign Oil Company to explore for
Hydrocarbons within an agreed ‘Block”
 Valid for a set number of years with a commitment for a minimum amount of
exploration
 Price is paid to “lease” the block
 Royalty and/or % split of “Profit Oil” is determined.
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Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
SECOND PHASE
BASIN ANALYSIS AND PROSPECT GENERATION
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Oil and Gas Formation
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Oil and Gas Reservoir
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Seismic Surveying
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SEISMIC OPERATIONS
PHYSICAL DAMAGE
•EXPLOSIVES - IN TRANSIT / IN STORAGE
•AUTOMOBILES
•SEISMIC VESSEL
LIABILITY
•THIRD PARTY LIABILITY
•EMPLOYERS LIABILITY
} OWN EMPLOYEES
•WORKMANS COMPENSATION
LOW RISK PHASE OF OPERATION
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READ THE CONTRACT
NOT JUST THE INSURANCE SECTION OF THE CONTRACT
• INSURANCE CLAUSE
• LIABILITY CLAUSE
• INDEMNITY CLAUSE
12
Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
THIRD PHASE
WILDCAT and EXPLORATION DRILLING
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Major Risks Associated with Oil and Gas
Upstream
Well Blowout: Costs of control:
Loss of the Well:
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Major Risks associated with Oil and Gas
POLLUTION AND OTHER THIRD PARTY LIABILITY RISKS
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Well Layout
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Directional Drilling
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Jack-Up Rigs
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Semi-Submersible Rigs
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Drill Ships
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Drill Bits
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Mud System
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Drill Pipe
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Well Casing
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Blowout Preventer
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Establishing Production
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When Things Go Wrong!
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Deepwater Horizon
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Deepwater Horizon Recovery Measures
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Major Risks Associated with Oil and Gas
Upstream
Well Blowout: Coverage required.
Associated costs including Costs of control, Re-drilling costs,
Clean-Up of seepage and pollution Operators Extra
Expenses (OEE)
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Major Risks associated with Oil and Gas
Third party liabilities in all stages:
(CGL) Comprehensive General Liability Insurance
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EXPLORATORY DRILLING (1)
PHYSICAL DAMAGE
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•
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RIG
DRILLING EQUIPMENT / CONSUMABLES
IN HOLE EQUIPMENT
AUTOMOBILES
CARE CUSTODY AND CONTROL
CARGO
EXPLORATORY DRILLING (2)
LIABILITY OF OPERATOR
• THIRD PARTY LIABILITY
• EMPLOYERS LIABILITY
• WORKMANS COMPENSATION
OPERATORS EXTRA EXPENSES (INSURANCE OF THE WELL)
• COST OF WELL CONTROL
• REDRILLING EXTRA EXPENSES
• CLEAN UP OF SEEPAGE / POLLUTION
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DRILLING OPERATIONS
OFFSHORE WELL
Drilling Equipment offshore
PHYSICAL DAMAGE and DRILLING OPERATORS LIABILITIES
Drill ships
Jack-up drilling units
Semi-submersibles
Submersibles/swamp barge
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Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
FOURTH PHASE
APPRAISAL DRILLING
COVERAGES AS PER EXPLORATORY DRILLING
37
Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
FIFTH PHASE
FIELD DEVELOPMENT CONSTRUCTION
AND INSTALLATION
39
Major Risks Associated with Oil and Gas
Loss of or damage to production/process equipment during
Construction Fabrication, load-out, installation, testing and
commissioning: (CAR or OFFSHORE BUILDERS’ RISKS)
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Construction and Installation (1)
PHYSICAL DAMAGE
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•
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CONSTRUCTION INSURANCE ON PRODUCTION
FACILITIES (ON/OR OFFSHORE)
DRILLING EQUIPMENT / CONSUMABLES
IN HOLE EQUIPMENT
AUTOMOBILES
CARE CUSTODY AND CONTROL
CARGO
FSO/FPSO AND ALL MOORING FACILITIES
Construction and Installation (2)
LIABILITY
•LIABILITY UNDER CONSTRUCTION POLICY
•LIABILITY FOR DRILLING OPERATIONS
•EMPLOYERS LIABILITY
•WORKMANS COMPENSATION
OPERATORS EXTRA EXPENSES (DRILLING AND EXISTING)
•COST OF WELL CONTROL
•REDRILLING EXTRA EXPENSES
•CLEAN UP OF SEEPAGE AND POLLUTION
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Construction of Fixed Platform
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Oil and Gas Risks and Exposures (E&P cycle)
NIGERIAQIT
CAMEROUN
Abandonment
Acreage acquisition
LAG
OS
Reservoir Mgt
QI
Operations
L
Basin analysis
Prospect generation
Facilities installation
Exploration and
Production Life
Cycle
Facilities construction
Facilities design
Economic analysis
ATA
Field
development
Wildcat Drilling
Appraisal drilling
(Rated B+ by AM Best)
Field
Development Plan
Economic
analysis
6
SIXTH PHASE
FACILITY OPERATIONS AND RESERVOIR
MANAGEMENT
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Major Risks Associated with Oil and Gas
Loss of or damage to production/process equipment during
operation:
Operational All Risks Insurance
Upstream
Downstream
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PRODUCTION (OPERATION) (1)
PHYSICAL DAMAGE
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ONSHORE PRODUCING ASSETS
OFFSHORE PRODUCING ASSETS OIL STOCKS
OIL AND GAS STOCKS
FSO/FPSO AND MOORING SYSTEMS
PIPELINES
DRILLING EQUIPMENT / CONSUMABLES
IN HOLE EQUIPMENT
AUTOMOBILES
CARE CUSTODY AND CONTROL
CARGO
PRODUCTION (operational) 2
LIABILITY
•
THIRD PARTY LIABILITY
•
EMPLOYERS LIABILITY
•
WORKMANS COMPENSATION
OPERATORS EXTRA EXPENSES (DRILLING AND EXISTING)
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•
COST OF CONTROL
•
REDRILLING EXTRA EXPENSES
•
CLEAN UP OF SEEPAGE AND POLLUTION
Oil and Gas Risk Exposures
Oil and gas value chain
Exploration
& Development
Hydrocarbon
Production
Shipping
Refining
& Blending
Storage
Distribution
Marketing
Other insurances in the value chain
REFINING,STORAGE and DISTRIBUTION
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Refining and storage
Physical Damage and Liabilities
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Refineries
LNG plants
Petrochemical plants
Fertiliser plants
Storage depots
Stocks of crude and product
All Risks coverage
Machinery Breakdown
Business Interruption
Liabilities
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Transportation
Physical damage and liabilities
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Pipelines/Compressor Stations
Road tankers (land)
Oil tankers (sea)
LNG carriers
LPG carriers
Product in transit
Product in pipelines
Coverage
• Hull
• Cargo All risks
• Property All Risks
• Auto
• Associated liabilities
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Recommended coverage
Operator extra expenses (Insurance of the wells drilling, in
production, work over and suspended)
Coverage: EED8.86+ALL EXTENSIONS
• Well control
• Re-drilling extra expenses
• Clean up of seepage and pollution
Combined single limit for offshore operations a minimum of five
times AFE for onshore a minimum of three times AFE
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Recommended coverage
Liability
• Offshore operations minimum limit $100million any one occurrence.
• Onshore operations minimum limit $50million any one occurrence.
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Recommended Coverage
Physical Damage of production assets under construction
(offshore): WELCAR 2001 WITH EXTENSIONS
• Sum insured: Full contract value plus 25%
• Sub limits for defective parts, leak search, removal of debris,
mobilisation & de-mobilisation etc
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Recommended coverage
Physical damage of production assets in operation: ALL RISKS POLICY
FORM.
• Sum insured: New replacement value
• Sub limit removal of debris.
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Other Coverages
Construction
• Delay in Start up
Operational
• Loss of Revenue/Business Interruption
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THANK YOU