“As many oil and gas installations reach the end of their productive life, the energy industry faces new risks associated with decommissioning and dismantling these platforms”, warns Willis Energy, a division of Willis Group Holdings plc.
Willis estimates that a large number of offshore oil and gas platforms will be decommissioned in the years ahead. It pointed out that in the North Sea alone it is estimated that over the next few decades the total costs associated with offshore decommissioning could reach £30 billion ($48 billion).
“Dismantling and removing large offshore platforms, particularly those located in inhospitable environments, is a serious operational and logistical challenge. But increasingly legislation compels companies to do this,” explained Chris Dear, Managing Director of Willis Energy. “As a result, energy companies face a number of significant risks, including seepage and pollution and complex contractual liabilities.”
He also noted that “major platform operators and leading insurance underwriters believe that the unique exposures arising out of these specialized projects require a bespoke insurance policy.”
As a result Willis has teamed up with a group of Marine and Energy insurers committed to underwriting this class of business and has launched an “Offshore Dismantling & Removal Insurance Facility,” designed to “assist clients with these challenges and help them manage the risks arising from decommissioning offshore oil and gas platforms.”
Willis said: “The policy is designed to address specific decommissioning risks, including contractual liability exposures. The policy also covers seepage, pollution and contamination risks.” It also extends “standard removal of wreck cover to also address the high profile “heavy lifting” risks unique to decommissioning projects.
“The policy also provides platform operators with extra cost and expense cover and, if required, physical loss and damage cover. Willis has also developed a risk matrix to help clients assess their exposures,” Willis explained.
Dear added: “Members of the Willis team have designed Offshore Dismantling & Removal Insurance Programs for some of the largest projects in the world. We firmly believe that, in conjunction with our Decommissioning Security product, our new Offshore Dismantling & Removal Facility places Willis at the forefront of risk transfer solutions for platform decommissioning activity.”
Source: Willis Group Holdings plc
Was this article valuable?
Here are more articles you may enjoy.
Vintage Ferrari Owners’ Favorite Mechanic Charged With Theft, Fraud 
Soaring Insurance Costs Hit as US Buyers Finally Get a Break on Car Prices 
US Dog-Related Injury Claims Hit $1.12 Billion in 2023: Triple-I, State Farm Report 
Florida’s Slide Insurance Secures $210 Million Catastrophe Bond 
