Energy Insurance
“Ultimate Risk and Reward”
Heath Callan
Heath Callan
Energy Underwriter
Argenta PLC
The Energy Industry
explained….
Energy Defined
“The exploration, production and marketing of hydrocarbons and related energy products.”
Exploration & Production
Refining &
Processing Petrochemicals
Transportation
•
Upstream•
MidstreamInsurance Market Divisions
•
Midstream•
Downstream•
Seismic ExplorationSeismic Exploration
1800 –3200 meter long towed streamers
Chase boat
Chase boat
6-8 meters below sea surface
Sound waves. No harmful effects on fish
•
Seismic Exploration•
Drilling Exploration•
Seismic Exploration•
Drilling ExplorationUpstream
30 inch 223 m 20 inch 900 m Seabed Sealevel Wellhead
How a well is drilled
14 inch 3600 m 5050 m 10 3/4 inch 5800 m 7 inch liner
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Seismic Exploration•
Drilling Exploration•
Control of Well•
ConstructionUpstream
•
ConstructionControl umbilical Suction anchors Offloading buoy
Gas injection well
Production loop Subsea production well
gas injection line
Offloading tanker Offloading
lines Anchor lines
Water injection line
SCR
Gas export line
Control umbilical Suction anchors Offloading buoy
Gas injection well
Production loop Subsea production well
gas injection line
Offloading tanker Offloading
lines Anchor lines
Water injection line
SCR
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Seismic Exploration•
Drilling Exploration•
Control of Well•
ConstructionUpstream
•
Construction•
Production Risks•
Seismic Exploration•
Drilling Exploration•
Control of Well•
Production RisksMidstream
•
Production Risks•
Midstream•
Seismic Exploration•
Drilling Exploration•
Control of Well•
Production RisksRefining
•
Production Risks•
Midstream•
Refining•
Seismic Exploration•
Drilling Exploration•
Control of Well•
Production RisksPower Generation
•
Production Risks•
Midstream•
Refining•
Power Generation•
Lloyds advantages•
Access to business•
Portfolio Management•
Clash / AggregationsUnderwriting an Energy Portfolio
•
Clash / Aggregations•
Realistic Disaster Scenarios•
Capital Requirements•
Market performance15 20 25 30 15 20 25 30
WELD energy losses 1990 – 2011 (excess of US$ 1m) versus estimated global energy premium income
US$bn US$bn
20 YEAR OVERALL LOSS/PREMIUM TOTALS
0 5 10 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11* 0 5 10
Losses excess US$1m Estimated Worldwide Premium (US$)
* incurred to date
•
Market performance•
Unprecedented run of high value risk losses•
Market performance•
Unprecedented run of high value risk losses•
Capacity2,000 2,500 3,000 3,500 4,000 4,500 5,000
US$m Upstream Insurer Capacities 2000-2011
(Excluding Gulf of Mexico Windstorm)
2011 CAPACITY INCREASED
0 500 1,000 1,500 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Willis OperatingConstruction 2011 upstream capacity highest since records began
•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Shale plays•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Cost of steel / Rising costs•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Current Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Cost of steel / Rising costs•
Third Party Liability and allocation of contractual risk•
OEE - standalone•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Shale playsCurrent Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Cost of steel / Rising costs•
Third Party Liability and allocation of contractual risk•
OEE - standalone•
Market performance•
Unprecedented run of high value risk losses•
Capacity•
Deepwater and subsea risks•
Shale playsCurrent Issues
•
Shale plays•
Frontier territories•
Political upheavals•
Cost of steel / Rising costs•
Third Party Liability and allocation of contractual risk•
OEE - standalone•
OPA / OPOL Pollution coverage•
Noble / Delek and Leviathan•
Zion Oil and Gas•
ATP•
Development Options ?Israel Energy Sector
•
Gas market•
Recent issue reported at Leviathan•
Political / Terrorism Risk•
OPA / OPOL for Israel ?•
Local infrastructureQuestions
Heath H. Callan
heath.callan@argentaplc.com heath.callan@argentaplc.com
