Case Study: P36 - Disaster and Recovery An example from the offshore industry

Transcription

1 1 st International Meeting on Enterprise Risk Management for the Oil Industry Case Study: P36 - Disaster and Recovery An example from the offshore industry Luiz Octavio P. de Mello Cid Valerio Insurance Manager, HSE Manager Mexico City, November 4-5, 2002

2 Topics Company Overview P-36 Accident Roncador overview Internal Inquiry Commission work Graphic simulation Petrobras Program for Excellence in Offshore Operations Insurance Coverage and Claim Lessons

3 Company Overview Proven reserves: billion boe (SPE) Oil & gas production: million boe/d E&P 14 Refineries Capacity: million bpd Refining, Pipelines: 15,330 km Transportation, Trading Gross Revenue US$ 34 billion Retailing Ethylene production: 3 million ton/year Petrochemicals Natural Gas More than 7,000 service stations (34% of the Brazilian retail market) (2001 figures) Marketed gas: 1.16 billion scf/d An Integrated Oil & Gas Company

4 Company Overview - Peers Comparison ProvenReserves (billion boe) as of Dec 31, Refining Capacity (thousand bpd) Exxon Mobil 20,9 Exxon Mobil Royal Dutch/Shell 18,8 Bp Bp 14,4 Royal Dutch/Shell Chevron Texaco 11,8 TotalFinaElf TotalFinaElf 11,0 Chevron Texaco Petrobras 9,3 Petrobras Phillips/Conoco Eni Repsol - YPF 8,7 6,8 5,6 6th Phillips/Conoco Repsol - YPF Eni th 2001 Oil and Gas Production (million boe) EBTIDA (2001) Exxon Mobil Royal Dutch/Shell Exxon Mobil Bp Royal Dutch/Shell Bp Chevron Texaco 983 Chevron Texaco TotalFinaElf 802 TotalFinaElf Phillips/Conoco 603 Eni Petrobras 558 Phillips/Conoco Eni Repsol - YPF th Repsol - YPF Petrobras th (*) Repsol- YPF 2000 Figure

5 Campos Basin Campos FRADE RONCADOR Lagoa Feia ALBACORA ALBACORA LESTE MARLIM 50m 50m 100m 100m 400m 400m 1000m 1000m 2000m 2000m m MARLIM SUL

6 Roncador Discovery 1996 Water Depth 1,500 to 1,900m Proven reserves - 2BN boe First Oil Pilot System in 1999 Permanent Production System May 2000

7 Permanent System P-47 P-36 Shuttle Tanker Gas line Oil Line Reservoir Well

8 P-36 Built in Italy in 1994 Upgraded in Canada in 1999 Capacity Oil 180K bpd Gas 7.2 M m 3 /day Water Injection 150K bpd

9 March Wells Oil 84K bpd Gas 1.3M m 3 /day

10 P-36 Accident 15th March

11 Accident Timeline 15 th March 00:22h First Explosion inside one column 00:39h Second Explosion 06:00h Platform Abandonment 15 th to 20 th March Rescue Attempts 20 th March 11:41h - Final list & Platform Sinking

12 Company Experts Universities Workers Union Inquiry Commission Independent Consultant Company

13 Methodology Witness Statements Photographs Video Data collection Computer Records Documentation HAZOP Stability Analysis Develop Hypotheses Test Hypotheses Dispersion Model Explosion Analysis Accident timeline development Visit Jack Bates Documentary Analysis Scope of Verification Iterate Timeline/Hypotheses Rejected Hypotheses Management System Audit Formal Accident Inquiry Final Report Immediate Causes Basic Causes Recommendations

14 Video

15 Main Conclusion: Like every major accident, the P-36 one did not occur due to one single cause but due to a sequence of factors combined in a specific and exclusive way. Basic Causes Improvement Opportunities Program

16 Program for Excellence in Offshore Operations

17 Mandatory Requirements Focus - Personnel Behavior and Attitude Quickly Translated into Actions Bring Everybody Together - Commitment

18 PEO Improvements Work Organization Operational Procedures Maintenance Procedures Safety Procedures Commitment Attitudes Behavior Contingency Plans Design Guidelines

19 PEO Phases 1 Mobilize People dissemination and discussion - Over 2000 people involved. Concluded September/ Set the Program up Critical Analysis of the Reports / Several Review Sessions Over 200 Experts Involved. Concluded October/ Implement the Program Start: October Finish: December Audit the Business Units Two Internal Audits -January and July 2002.

20 Examples of Ongoing Tasks Criteria for Area Classification; Criteria for Multipurpose Pumps; Criteria for Ballast Pumps Power Supply; Review of Onboard Organization Chart; Alarm Design Criteria; Work Permit Procedures; Management of Change; Salvage Center.

21 P-36 policies - Property Fronting Insurer: Bradesco leading a pool of local insurers (Itaú,Unibanco,AGF, Tokio): 0,98% of the risk Period: 01/03/2000 to 28/02/2001, extended until March 2001 Coverage: All Risks, London Standard Platform Form Sum Insured: US$ 500 million (US$ 6,5 million deductible) Liability: US$ 50 million - London Offshore Third Party Legal Liability Occurrence Form - Amended Sue & Labor / Wreck Removal : 25% of insured amount

22 P-36 policies - Construction All Risks Insurer: Pool of insurers (AHE) Period: 15/09/1997 to delivery to Petrobras (April 2000) with 12 month maintenance period; Coverage: Section I: All Risks, Section II: Liability Original assureds: Petrobras and Marítima

23 Chronology 15/03/2001 to 31/03/2001 Notice of Loss to Bradesco / AON Matthews Daniel Intl. appointed as loss adjusters Arrival of loss adjusters Notice to CAR underwriters of possible claim Petrobras hires INDECS/ TAYLOR RISKS as advisor April 2001 Matthews Daniel presents preliminary report to underwriters Proposal for settlement agreement with property underwriters Bateman Chapman appointed loss adjuster by CAR underwriters

24 Chronology June 2001 Settlement agreement executed Internal Enquiry Committee Final Report July 2001 Effective Payment of the claim ($ million)

25 Lessons Robust underwriters Key to quick settlement: Direct Indemnity Clause / Claim Control Clause direct negotiation with underwriters and loss adjuster. Highly skilled broker: AON Notifications, Assistance, Follow up adjuster s report Realization of settlement Experienced Loss Adjuster: Matthews Daniel Loss Adjuster early arrival at the site: sue & labor proper planning claim preparation Cat Claim Experienced Advisor: Taylor Risk/ INDECS

26 P-34 FPSO located between the Caratinga and Barracuda fields in the southern area of Campos Basin Daily output of barrels and m3 of gas Crew: 76 persons 13/10/02 approximately 15:30 malfunction in main power supply causing it to develop a list of approximately 32 degrees No explosion no fire, no oil spill Crew abandoned platform, no casualties Water was pumped in tanks 17/10/02 : platform stabilized Investigation Commission will determine causes of the accident

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