Energy Insurance Ultimate Risk and Reward

8/10/2019 Energy Insurance Ultimate Risk and Reward

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Energy InsuranceUltimate Risk and Reward

Heath CallanEnergy UnderwriterArgenta PLC


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The Energy Industryexplained.


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Energy Defined

The exploration, production and marketing

of hydrocarbons and related energy products.

Exploration &Production

Refining &Processing

PetrochemicalsTransportation

& StorageUtilities


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Upstream

Insurance Market Divisions

s ream

Downstream

Utilities


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Seismic Exploration

Upstream


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Seismic Exploration

1800 3200 meter longtowed streamers

Chase boat

Chase boat

6-8 meters below seasurface

Sound waves. No harmfuleffects on fish

Chase boat


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Seismic Exploration

Drilling Exploration

Upstream


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Seismic Exploration


Upstream

Control of Well (Operators Extra Expense (OEE))


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30 inch 223 m

20 inch

900 m

Seabed

Sealevel

Wellhead How a well is drilled

14 inch3600 m

5050 m10 3/4 inch

5800 m

7 inch liner


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Seismic Exploration


Control of Well

Upstream

Construction


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Control umbilical

Suction anchors

Offloading buoy

Gas injection well

Production loop

Subsea production well

gas injection line

Offloading tanker

Offloadinglines

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

Offloadinglines

Anchor lines

Water injection line

SCR

Gas export line


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Seismic Exploration


Control of Well

Upstream

Construction

Production Risks


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Seismic Exploration


Control of Well

Midstream

Production Risks

Midstream


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Seismic Exploration


Control of Well

Refining

Production Risks

Midstream

Refining


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Seismic Exploration


Control of Well

Power Generation

Production Risks

Midstream

Refining

Power Generation


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Lloyds advantages

Access to business

Portfolio Management

Underwriting an Energy Portfolio

Clash / Aggregations

Realistic Disaster Scenarios

Capital Requirements

Reinsurance


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Market performance

Current Issues


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15

20

25

30

15

20

25

30

WELD energy losses 1990 2011 (excess of US$ 1m)versus estimated global energy premium incomeUS$bn US$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

Source: Willis Energy Loss Database as at May 13 2011 (figures include both insured and uninsured losses)


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Market performance

Unprecedented run of high value risk losses

Current Issues


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Market performance


Capacity

Current Issues


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2 000

2,500

3,000

3,500

4,000

4,500

5,000

US$mUpstream Insurer Capacities 2000-2011

(Excluding Gulf of Mexico Windstorm)

2011 CAPACITY INCREASED

0

500

1,000

1,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Willis

Operating

Construction2011 upstream capacity highest since records began

Estimated realistic market capacities


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Market performance


Capacity

Deepwater and subsea risks

Current Issues


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Market performance


Capacity


Current Issues

Shale plays


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Market performance


Capacity


Current Issues

Shale plays

Frontier territories


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Market performance


Capacity


Current Issues

Shale plays


Political upheavals


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Market performance


Capacity


Current Issues

Shale plays


Political upheavals

Cost of steel / Rising costs


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Market performance


Capacity


Current Issues

Shale plays


Political upheavals


Third Party Liability and allocation of contractual risk


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Market performance


Capacity


Current Issues

Shale plays


Political upheavals


Third Party Liability and allocation of contractual risk

OEE - standalone


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Market performance Unprecedented run of high value risk losses

Capacity Deepwater and subsea risks Shale plays

Current Issues

Frontier territories Political upheavals Cost of steel / Rising costs Third Party Liability and allocation of contractual risk OEE - standalone OPA / OPOL Pollution coverage


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Market performance Unprecedented run of high value risk losses

Capacity Deepwater and subsea risks Shale plays

Current Issues

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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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 infrastructure

What if........MUST be considered.


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Documents

Energy Insurance Ultimate Risk and Reward