Global insurance broker Willis has launched a new insurance facility to cover offshore decommissioning risks, including risks in Canadian and provincial waters.
Willis Energy, a division of Willis Group Holdings plc, notes that 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. In the North Sea alone, for example, the total costs associated with offshore decommissioning could reach approximately Cdn$48 billion over the next few decades.
“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” said 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.”
The unique aspects of decommissioning risks require a bespoke (custom-made) insurance policy, Willis stated. The broker has thus launched an ‘Offshore Dismantling & Removal Insurance Facility’ in conjunction with a group of marine and energy insurers committed to underwriting this class of business.
The policy is designed to address specific decommissioning risks, including contractual liability exposures, seepage, pollution and contamination risks.
In addition, Willis has extended standard removal of wreck cover to 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.
The coverage is available for Canadian offshore decommissioning risks.
“Willis Energy’s offshore dismantling and removal facility can consider risks on a worldwide basis, including Canadian and provincial waters,” said David Hallows, executive director of Willis Energy. “Willis Energy administers domestic oil and gas risks from their office in Calgary.”
