wgp 107 (18) offshore oil and gas platforms · unit in 1947. •an oil & gas offshore platform...

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WGP 107 (18) Offshore Oil and Gas platforms

Eric Brault - Energy Practice Leader

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PROTECT PREVENT SERVE RESOLVE PARTNER

Part icipants: Eric Brault – AXA Coporate Solutions - Chairman Martin Kauth - Partner Re Mark Mackay - AXA Corporate Solutions Alain Padet - AXA Corporate Solutions Mike McMahon - Charles Taylor Consultant Mohamed F. El-Ailah - Qatar General Ins Javier Rodriguez Gomez - Reinsurance Consultancy Mexico Roman Emelyanov - SOGAZ Insurance Group Thomas Friedrich – Munich Re Eve Ong - Helvetia

Stephan Lämmle – Munich Re – Sponsor

OFFSHORE OIL& GAS PLATFORMS

IMIA WGP 107 (18)

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Technical descript ion of Offshore Plat forms Construct ion process and components Informat ion needed and Underwrit ing Considerat ion Pure Insurance Aspects MPL Considerat ions and Accumulat ion driving system Example of Loss Recommendat ions Conclusion

The development of an oil field is a broad complex subject, which needs strong analysis.The Presentation is a overhaul view of the risks assessment, concerning the construction of the offshore platforms. We do not focused on specific subjects such as:

Covers of the drilling of wells , risk inherent to the research for new oilfield, operation of the platforms, processes for NG and oil, pressurizing, storage, market absorption and dismantling ...

We pay attention on the risks to anticipate and balance the construction phase, weather and sea condition impact, importance of the design, the safety systems, details on the MPL scenarios during the construction, putting in place of the platform and starting of operation phase. The MWS role and his importance is also described. We also described an example of claim, which is a “typical common incident” which may happen during construction period, and give some recommendations to handle the underwriting of cover of the erection and testing..

Executive summary

1Technical description of Offshore Platforms

•The first real platform was the Kermac 16 for the first offshore well drilled unit in 1947.

• An Oil & Gas Offshore Platform is a structure which allow one of the following functions:The extraction, the field treatment, the storage, the transfer, the usual functions to which allow people working safety, in a far away isolatedsea environment.

•The units are of different type of design and of construction methods according to:

•Their functions and type of field•The weather and sea environment•The expected life and operation time (size of the field)

• The offshore Oil & Gas production is representing 1/3 of the worldwideproduction

Technical description General matters and history

Technical description

• 3 main types of units are summarizing the functions definition:

•The MODU: Module Offshore Drilling Unit• The PP: Production Platform, (well heads and process modules)• The LQ: Living quarters

•MODU: used for drilling and close with caps the preformed wells waiting for the PP arrival• The PP :Are used to re-open the wells which are dedicated to it and operate during time life with necessary process. • The LQ: Includes all facilities for the human being with safety systems.

• The development of field structure includes:

•Offshore structures, with platforms• Systems to carry out the oil or NG, time to time storage (can be pipes or vessels)• Onshore facilities for oil and NG treatment and market to absorb production

General matters and history

• 8 types of units are commonly used. The choice is defining according to environmental condition of field

• According to the field location and perspectives of operation/production, designers are proposing fixed units or floating systems

• Fixed units up to 1000m depth, (1,2, 3, 4)

• > 300m floating units are used(5, 6, 7, 8)

• Field production is really known at drilling results

• Financing of projects needs heavy commitments from companies, with sharing of units.

Technical description Different Types of design - Different uses - Different environments

What is a field development project?

• A Project is defining with different phases:

Getting authorization for research in the boundaries limits of an area

Research, with Seismic Radiography of the area (on site several months), and analysis of results, several years (up to 4 years)

Decision to go ahead!

Starting of project with: Fitting of platforms (MODU first) and starting of construction of Production platform, transportation, positioning, developing of project with piping, risers, connections of drilled wells, opening of caps on wells bored by MODU, positioning of other platforms …globally up to 4 to 6 years duration, and huge contracts for local firms

Operation ==> during 20 years and more

Stopping and decommissioning of the units

Technical description Field Project Definition

Project time scheduleTechnical description

Field Project Definition

Subsea Infrast ructures

Plat forms Construct ion

Export systems fit t ing

Onshore systems construct ion

MODU Drilling

Curves of production

• Questions for UW:

• What is the “PROJECT”?

• What is included in TSI?

• What is the duration of Cover?

• What are we covering?

• Where is the end of Construction?

Technical description Field Project Definition

2Construction Process and Components

• Construction Process of platform:• Shipyard construction and assembling of structures, • Foundations and mooring systems preparation• Towing and siting of platform• Evacuation systems connections• Caps opening and connection……• Test and commissioning

• Fields components:• MODU drilling and cap closing system, • Production platforms and LQ Platforms• Connection of wells, umbilicals and pipes• Evacuation systems fittings and pipes or others• Complementary treatment plant onshore

• Each field is different, with its own designed Items!

Construction process & Components Differentiate Field Level components, Platform Elements

The Structure can be barged and with floaters located in field position .

The Structure itself which support the topsides is built on shipyards

Construction process & Components Platform components – The supporting structure

Functions and components:• MODU drilling :

• Drilling systems• Production Platform

• Processes systems• Flare• Well connection systems with valves• Crane

• Living Quarters Platforms:• Living Quarters• Power generation and distribution system• Electrical Heating system• MEG bulk storage and distribution system• Subsea hydraulic power system• Subsea controls interface• Chemical systems • Utilities, platform support systems and Infrastructure• Safety systems, etc

• Other components• Umbilical, Pipes to the storage• evacuation systems

Construction process & Components Platform components – The Topside

For the FPSO the system is adapted to, floating turning unit with turret

MEG: Mono Ethylene Glycol, Dehydration component to anticipate freezing in offshore process.

• The Oil or natural gas are containing impurities and unacceptable elements. • They shall be primary treated to allow it to be transported in good conditions.

• Platforms are also containing necessary processes for treatment


The topsides are built on shipyards with modules coming from different pre-erection sites


The topsides towed with barge and positioned on structure with ballasting of barge

The checking and commissioning will start, safety systems implementation first , and finally the first connections to wells will be ready to be established.

• The Concrete fixed platforms are towed then ballasted at right location.

• Different methods are used :

All together or structure first then after topside are barged.


3Information needed and Underwriting Consideration

Production Platform Oil and NG

Live platform

Production platform

Well platform

Definition of the platform:• Technical description, including the process• Technical description of the boundary limits of the concerned

project• Description of the construction method • Localization of the Construction facilities

• Explanations on the travel and positioning systems,• Constructors, transportation, positioning firms references

• Safety and prevention standards for fire and explosion

Information needed and UW ConsiderationInformation and details which are necessary for UW

Underwriter will be concerned by:

1. Policy wording scope (perils covered and extensions dedicated to sea risks), 2. Definition of the scope of equipment to cover (see previous possible variation)3. External hazards, wells connection…4. Natural hazards exposure, sea condition VS period of works at sea5. Project inherent hazards with design details.6. Concerned Processes 7. Construction methods8. Transportation systems9. Sea bed and environment10. Foundations and anchorages11. Equipment for construction, mobilization and demobilization

Information needed and UW ConsiderationRisk Exposures for underwriting point of view

• The goal of the MWS is to make reasonable endeavour to insure that the risk associated with the warranted operations to whicha MWS is appointed are reduced to an acceptable level in accordance with the best industry practice

•The MWS company will only appoint personnel who are demonstrably competent in terms of qualification and experience to perform the review/approval activity being undertaken in accordance with the MW scope of work.

•The MWS will be satisfied so far as possible that the operation are conducted in accordance with:• Recognized code of practice for design and operations.• Best Industry practices appropriate for the vessels, platforms, equipment and location…• Vessels, platforms and equipment being used within defined safe operating limits…

The MWS will make available to UWs:• A schedule of actual and proposed site attendances. • A schedule of certificates of Approval to be issued

*Survey association Nov 2015

THE MWS IS GIVING TO THE UW, A 2nd VIEW ON THE PROJECT, FOR THE DESIGN BUT ALSO DURING CONSTRUCTION AND TRANSPORTATION OF ELEMENTS

Marine Warranty Surveyor Role*

Information needed and UW ConsiderationRisk Mitigation - How to balance the risk?

4Pure Insurance Aspects

Pre-erection structures

• Over size of parts•Tailor made construction• Dedicated construction procedures• Concrete specifications

Exposures

• Shipyards pre erection and specific vessel for building•Handling mistakes (on shore erection sites)•Loading and unloading on dedicated transportation systems

Risks

•Property damages from erection on shore and ship-yard• Defective part, defective design, defective workmanship• Handling in harbors•Defective material

Risk Analysis per phase – Erection of Structure - Oversize is the bottleneckPure Insurance Aspects

Topsides, Pre-erection weight is bottleneck!

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Pre-erection on Shipyards

• Over size of parts, as for upstream offshore platforms•Tailor made pre-erection •dedicated erection procedures

Exposures

• Shipyards pre erection•Handling mistakes (on shore erection sites)•Loading and unloading on dedicated transportation systems

Risks

•Property damages from erection on shore and ship-yard•Defective part, defective design, defective workmanship•Handling in harbors

Pure Insurance Aspects

Piling, soil preparing

positioning

• Over size of parts, Foundations•Tailor made construction tools •Dedicated erection procedures•Special grouting and material for salting water

Exposures

• Sea works uncertainties, Water depth and high pressures under sea,• Positioning• Faulty design or workmanship, Method of work , Scour protection,• Sea bed disturbance impacting pile and jacket installation,• Aggressive external conditions : salty environment, waves,• Unavailability of specialized vessels, for transport, construction and erection• Submarine explosions• Act of God• Loading and unloading on dedicated transportation systems

Risks

•Property damages from construction off-shore•Defective part, defective design, defective workmanship•Handling in harbors

Pure Insurance AspectsFoundation piling & fix the jacket! – Complex works - Strong condition!

Topsides / Platform Transportation, positioning, Size/weight bottleneck!

TransportationPositioning

• Over size spare parts Tailor made transportation•Tailor made positioning on structure

Exposures

• Loading and unloading on vessels• Transport risks - Specialized vessels• Availability of specialized vessels, for each step• Collision risks• Fire, NAT CAT impacting manufacturing plants equipment

Risks

•Property damage off shore due to handling•Property damage during transport, loading, unloading, erection•Failure in the sea, sinking


Pipes layering - Connections to tanks and sea shore

TransportationLayering,welding

• Over size spare parts Tailor made transportation• Tailor made positioning on structure

Exposures

• Loading and unloading on vessels• Transport risks - Specialized vessels• Availability of specialized vessels, for each step• Collision risks• Design / methodology to install pipes : specialized vessels,• Seabed disturbance impacting pipes : drift• Submarine explosion • Act of God

Risks• Property damage off shore due to handling• Property damage during transport, loading, unloading, • Failure in the sea, sinking


Connections to well and Pre-commissioning

Tests & Commissioning

• Human and software, hardware AI involvement• Tailor made specifications

Exposures

• Assistance Vessel failure• Fire and explosion• Lack or failure of evacuation system • Collision risks with vessels• Failure of equipment, MB, valves

Risks

•Property damage off shore due to human mistake in process•Property damage with partial fire or destruction, delaying of project•Failure in the sea, sinking•Cyber


Swiss Cheese Model

Pure Insurance AspectsDefinition of the exposure and Layers of Protection

Pure Insurance AspectsDefinition of the exposure

Pure Insurance AspectsDefinition of the exposure

Major Exposures ident ified for MPL considerat ion:

Risks due to sea condition and consequences (transportation failure, sinking)

Fire and explosion during commissioning and opening of the wells, at starting of operation, VCE. Blow Out Preventer

Marine Warranty Surveyor

5MPL Considerations & Accumulation driving system

Detailed HazardsH M L H M L

Terrorism, PiracyX X

Defect Material, Design, erection X XLifting failure X XFundations, concrete,erection fault X XLaunching,Positioning X X

Construction operations X X

Hazard due to Vicinity X XEQ X XTempest X XFlood X XIce, snow, X XMarine peril X XMB X XExplosion X XFire X X

Frequency Severity

Leakages, Jet Fire / Pool fire

undersea EQ, weakness of fundations, colapseTyphon or winter strong tempest

sunkingAccumulation of ice on structures

Towing, colisions, helicopter impact

MPL or Loss Scenarios

Kidnap rancor or bomb destroy, Local attacks (e.g. explosive devices) to destroy platforms are most l ikely

l imited to restricted areas/sections.

Valve failure, linkage of NG or oil

Incident on another connected platform

Lifting, erection operations are intrinsically risky given special equipments and high rise structures (crane’s

jib failure).

bad positioning, impossible to connectColapse of platformdue to fundations

Module colapse

Process failure, Blockages: shaft,ombilicalBlow out / VCE, Hydrogensulfide presence

MPL ConsiderationMatrix of Exposures

Remark: Pure PD view

Terrorism/PiracyDefect (including

concrete and foundation)

Vicinity Natural Hazards Marine perils MBExplosion /

VCEFire

PeriodConv.FixedCompliant Towers

Fixed units Gravitary precom ShipyardPiling Foundations and preparing

towing and transportPositioning of structure

Final assambling of modulesChecking and cold test

commissioningwell Connection

Operation rising up

Jacked Legs Shipyard EAR/CARprecom Shipyard

Piling Foundations and preparingtowing and transport

Positioning of structureFinal assambling of modules

Checking and cold testcommissioning

well ConnectionOperation rising up

Contrete elementsShipyard EAR/CAR

Peril

Type of Platfrom


Terrorism/PiracyDefect (including

concrete and foundation)

Vicinity Natural Hazards Marine perils MBExplosion /

VCEFire

Peril

Type of Platfrom

Semi Sub Shipyard EAR/CARFloating units Tension Leg Contrete elements

SPAR precom ShipyardPiling Foundations and preparing




Operation rising up

FPSO Shipyard EAR/CARContrete elements

precom ShipyardPiling Foundations and preparing




Operation rising up


• Several companies on the same area, and same field/platforms.

• Strong tool with high data quality level following up, for day to day monitoring of company commitment.

• Example Berkut rig 12B$ at 100%

• Reinsurance triggers, (ie per loss, per event, per risk, and agg.) are key issues for the registration system

• Anticipation is necessary

• Scenarios and alternatives shall be explored

Accumulation driving systemNatural Hazards but not only!

6Loss Example

Module fall into salt water during unloading from transportation barge to pre-erection shipyard due to human mistake, pad eyes welds done on sheet casing instead on steel structure framework.

Example of lossMedium loss

Module was recovery in 20m depth water:Replacement costs USD 15,000,000Wording WELCAR 2001

• Who was responsible?• What is their status in the project? • What is the extent of their liability, if any?• Is there a ‘defective or faulty workmanship’ issue to be addressed?• If so, what is the defective part and what are the costs associated to rectifying the

defective part?

US$5,000,000 costs of installing the replacement module at the final location offshore North Sea. The lead time to fabricate a replacement module was 3 months and would have delayed sail away of the topside by 2 weeks. It is estimated that the Insured would have incurred an additional US$ 10,000,000 in hire charges for having the heavy lift vessel on standby for the 2 weeks.

• Is the additional cost of installing offshore reasonable and should it be included in the adjusted claim?

Example of lossMedium loss

7Recommendations

To be in posit ion to handle the construct ion risk in a good shape, some subjects shall be carefully weighed:

1. Phasing and technical documents are mandatory2. Split of client shares and their exposures3. Respect of the prevent ion procedures (according to standards)4. Exist ing Time schedule5. Clear definit ion of insured project , values, processes,

surroundings6. Fire fight ing facilit ies analysis with project fire risk7. Natural hazards exposures, and more generally sea condit ions.8. Vicinity risks, (other plat forms, harbours, vessels and seaways)9. Temporary vessels and equipment10. Part ial hand over expectat ion11. Evacuat ion systems12. Exist ing/requested wordings

Recommendations

8Conclusion

1. The risk study is fascinating and not easy to handle as a lot of factors are impacting the projects.

2. A pragmatic approach with all criteria analysis is necessary

3. The Segmentation of clients with different type of covers is a necessity

4. Taking into account the values, innovation in handling, the oversizing and high speed of project works, Offshore platforms are not “as been” systems and will remain strong challenges for Engineers and Underwriters.

5. Major recommendation is to require maximum information to bellow uncertainties and keep good sense of business.

Conclusion

Complex risk which need a specific approach

As Conclusion, the Global platform subject needs a wide range of complementary studies such as:

Operation and risks during live time, maintenance approach an consequences

Well boring risks, caps reopening end close and industrial processes on board, …

Environmental issues on petrochemical offshore risks Management of the accumulation of commitments for Insurance and

reinsurance companies Corporate responsibility in oil and gas industry, transition from fossil to

green energies, role of the Insurer (Re),

Risk in decommissioning and dismantling of units, the revamping…

Conclusion

Dismantling or let them as wrecks!

Thanks’ for your attention

Acknowledgements:

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Information Sources & Bibliography: acknowledgement for free using of Constructors explanation pictures & information from,

• Offshore code of Practice VdS 3549 en: 2014-01 (01) • “Introduction to Offshore Structural Engineering” By: PerIvar Lokstad, Senior Structural Engineer, Ph. D (Marine Technology, Norwegian Institute of Technology, Norway), Technip Geo-production (M) Sdn Bhd, Malaysia Khairudin Ahmad, Senior Structural Engineer, M. Eng. (Structural Engineering, Cornell University, USA), Technip Geo-production (M) Sdn Bhd, Malaysia

• Shah Deniz 2 Project ; “Environmental & Socio-Economic Impact Assessment: November 2013 Final Issue • Pictures of: “The Piltun-Astokhskoye-B (PA-B)”, the largest platform of the Sakhalin-2 project • https://www.connaissancedesenergies.org • “Fire and explosion modeling on off-shore oil and gas platforms”, Doctoral Thesis. Submitted in partial fulfillment of the requirements, for the award of Doctor of Philosophy of Loughborough University. By Jeni Louise Lewthwaite - April 2006 Loughborough University Institutional Repository • Birch, A. D., Brown, D. R., Cook, D. K. and Hargrave, G. K., Flame Stability in Under expanded Natural Gas Jets. Combustion Science and Technology, Volume 58, pp 267-280,1998. • Birch, A. D., Brown, D. R., Fairweather, M. and Hargrave, G., An Experimental Study of a Turbulent Gas Jet in a Cross-Flow. Combustion Science and Technology, Volume 66, pp 217-232,1989. • Lees, F. P., Loss Prevention in the Process Industries. Butterworth Heinemann, Reed Educational Publishing Ltd, Second Edition 1996

Acknowledgements:

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Information Sources & Bibliography: acknowledgement for free using of Constructors explanation pictures & information from,

• “Swiss Re Underwriting Offshore Energy Risks” Swiss Re Centre for Global Dialogue Gheistrasse 37 8803 Ruschlikon Switzerland - 2016 by David Sharp & Rick Perdian • “An Overview of Design, Analysis, Construction and Installation of Offshore Petroleum Platforms Suitable for Cyprus Oil/Gas Fields” by Kabir Sadeghi, GAU J. Soc. & Appl. Sci., 2(4), 1-16, 2007 Girne American University, Department of Industrial Engineering, Mersin 10, Turkey • “Introduction to Energy Insurance” by Gard AS, Arendal 21 October 2010 • “Construction Planning of an Offshore Petroleum Platform” By O. A. Muyiwa & K. Sadeghi Girne American University, Faculty of Engineering & Architecture, Mersin 10, Turkey

• Pictures from : Total, Tennet, BP, Sakhalin, Pertamina, Kvaerner, Exxon

• webside: www.connaissancedesenergies.org

wgp 107 (18) offshore oil and gas platforms · unit in 1947. •an oil & gas offshore platform...

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