Energy Insurance Ultimate Risk and Reward. Energy Underwriter Argenta PLC

Transcription

1 Energy Insurance Ultimate Risk and Reward Heath Callan Heath Callan Energy Underwriter Argenta PLC

2 The Energy Industry explained.

3 Energy Defined The exploration, production and marketing of hydrocarbons and related energy products. Exploration & Production Refining & Processing Petrochemicals Transportation & Storage Utilities

4 Insurance Market Divisions Upstream Midstream Downstream Utilities

5 Upstream Seismic Exploration

6 Seismic Exploration Chase boat Chase boat meter long towed streamers Chase boat 6-8 meters below sea surface Sound waves. No harmful effects on fish

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8 Upstream Seismic Exploration Drilling Exploration

9 Drilling Exploration

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11 Upstream Seismic Exploration Drilling Exploration Control of Well (Operators Extra Expense (OEE))

12 Wellhead How a well is drilled 30 inch 223 m Sealevel Seabed 20 inch 900 m 14 inch 3600 m 10 3/4 inch 7 inch liner 5050 m 5800 m

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15 Upstream Seismic Exploration Drilling Exploration Control of Well Construction

16 Gas export line Offloading lines Offloading tanker Anchor lines Water injection line SCR Offloading buoy Suction anchors Gas injection well gas injection line Production loop Subsea production well Control umbilical

17 Upstream Seismic Exploration Drilling Exploration Control of Well Construction Production Risks

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21 Midstream Seismic Exploration Drilling Exploration Control of Well Production Risks Midstream

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23 Refining Seismic Exploration Drilling Exploration Control of Well Production Risks Midstream Refining

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25 Power Generation Seismic Exploration Drilling Exploration Control of Well Production Risks Midstream Refining Power Generation

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27 Underwriting an Energy Portfolio Lloyds advantages Access to business Portfolio Management Clash / Aggregations Realistic Disaster Scenarios Capital Requirements Reinsurance

28 Current Issues Market performance

29 20 YEAR OVERALL LOSS/PREMIUM TOTALS US$bn 30 WELD energy losses (excess of US$ 1m) versus estimated global energy premium income 30 US$bn * 0 Losses excess US$1m Estimated Worldwide Premium (US$) * incurred to date Source: Willis Energy Loss Database as at May (figures include both insured and uninsured losses)

30 Current Issues Market performance Unprecedented run of high value risk losses

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32 Current Issues Market performance Unprecedented run of high value risk losses Capacity

33 2011 CAPACITY INCREASED US$m 5,000 Upstream Insurer Capacities (Excluding Gulf of Mexico Windstorm) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Operating Construction 2011 upstream capacity highest since records began Estimated realistic market capacities Source: Willis

34 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks

35 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays

36 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays Frontier territories

37 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays Frontier territories Political upheavals

38 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays Frontier territories Political upheavals Cost of steel / Rising costs

39 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays Frontier territories Political upheavals Cost of steel / Rising costs Third Party Liability and allocation of contractual risk

40 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks Shale plays Frontier territories Political upheavals Cost of steel / Rising costs Third Party Liability and allocation of contractual risk OEE - standalone

41 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks 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

42 Current Issues Market performance Unprecedented run of high value risk losses Capacity Deepwater and subsea risks 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 Hurricane impact.ivan / Katrina / Rita / Ike

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44 Israel Energy Sector Noble / Delek and Leviathan Zion Oil and Gas ATP Development Options? Gas market Recent issue reported at Leviathan Political / Terrorism Risk OPA / OPOL for Israel? Local infrastructure What if...must be considered.

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46 Questions Heath H. Callan