U.S. Firms Plan New Oil Spill Insurance Fund

By | October 7, 2010

  • October 7, 2010 at 8:58 am
    rocket88 says:
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    These companies simply cannot devote the kind of $ necessary to cover all contingencies. OIL, the largest of the mutual energy companies would have been pretty much insolvent with the size of the BP loss. That’s why they dropped their pollution cover. It appears that the solution should a combination of the drillers capitalization, the captioned fund and the insurance and reinsurance market. e.g., perhaps their should be a minimum amount of driller capitalization required, per foot, for offshore drilling depending on the distance between the surface and the drill spud. Than add the fund and insurance on top of that to meet the eligibility to drill to that depth.But, on the downside of this, what should the financial guarantee be? I assume the insurance industry and the oil industry can come up with numbers as to loss scenarios from shallow to deepwater drilling pollution losses, by foot, i.e., a cell analysis of various water depths.
    Just a thought.

  • October 7, 2010 at 11:23 am
    RM Guy says:
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    It might be easier to put together an insurance syndicate for this if the oil companies practiced safety redundances and risk avoidance whenever & where ever possible. There’s no such thing as spill free oil exploration; it will happen. The degree to which it occurs is a function of pre-loss activities and planning. Wildcatting on land is one thing. Wildcat exploration at sea is a different matter. Can you imagine the costs had the Deepwater Horizon event occurred in the Artic Ocean?! My guess is some multiple of the $30B estimate, and probably larger than 2X.

  • October 7, 2010 at 12:57 pm
    Ted says:
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    The oil and gas liabilities should be an industry exposure as these products are spongeable. The liabilities should be set up similar to maritime P&I clubs, assessable. In order to drill, refine, ship, sell the parties must show financial ability to pay 1005 of damages as determined by an independent body.
    If every explorer, service provider, gas line, gas station was on the hook, the industry would police itself. You don’t meet the most current standards, you pay into the fund through the nose. this would stop the responsible parties from using third party shell organizations from taking on the problematic aspects of this toxic business.
    If an organization was fully assessable, the Board of Directors would spend some time on risk assessment.



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