MISR INSURANCE COMPANY {st International Oil and Gas Seminar On * Management of Oil and Gas Risks ~ 9th & 10th April 1996 Venue ; MISR INSURANCE BUILDING Talaat Harb Conference Room1:30 12:00 13:00 | 400 Ist International Oil and Gas Seminar Management of Oil On oth & 10th April 1996 Under The Patronage of Minster of Feonomic and internat TUESDAY. 9th APRIL 1996 Opening, First segsion * Development in well control and its insurance Coffee) Break Second session © Aspects of down Stream all Risks Propert msurance Launch Third session * Global Insurance 1 Onl and Gag Industry = Gerviee & Protection ~ | 10:00 1 11:30 \ 13:00 | 14:00 and Gas Risks Cooperation WEDNESDAY 10th. APRIL 1996 WEDNESDAY 10th AFEE First session Achieving the Best insurance ‘And Rinsurance Results Through International Marketing of Oil & Petrochemical Risks Coffee Break Sect ‘ond session * Mobile Ofishore Drilling Unit claims Lunch. Third session * The Loss of Production in surance in oil companies |' ity ist International OW and Gas Seminar On > Management of Oil and Gas Risks ” oth & 10th April 1996 inder Phe Patronage of Minister of Econonme and international Cooperation 2 MR.MISBAL KAMAT RES DIRECTOR Or Venue > MISR INSURANCE BUILDING ALL DORK st. Giza Valaat Harb Conference RoomASPECTS ‘OF DOWNSTREAM ALL RISKS PROPERTY INSURANCE Introductory Remarks In the absence of a brief as to the theres to be covered, the Ute has, opted to address aspects of this class of insurance. The subj only sel certain underwri passing, ect, however, is vast and given the constraint of time ethed aspects wit! be introduced and commented on. Thus trfderpinnings, covsidered to be essential for ting purposes, wilt be either ignored or referred 10 Ng. engineering site surveys and the calculation of estimated [maximum Toss, professional valuation of insurable assest, jnsurance and reinsurance placement, etc. {if required, aeeee cant he verbally presented in the seminar]. Apologies) ore in order for these who may find parts of this presentation eitner clewentary, oF repeating apparently worn out themes. aspects receive Te is hoped that in the course of questioning, other re terest to tne participants in the seminar wi nedepth treatment. Evolution of the Al] Risks Form ANT piskp Property Insurance (ARPT) is in many ways a new form of Al panes protection for industriay fisks although, conceptually, it has insuran' valuabl evolved As far avai lab! jnsuran restri respec of busi and mat with ¢ looser the in eager peaigree in other forms oF insurance, @.9+ le policies for professional equipment, specified E eonstruct ion and engineering Works. ARPI, however, from Fire & Perils polcies. ¢ the London market is concerned, ARPI policies were S for corporate insureds only From the non-tariff & companies singe the tariff companies were bound by the Sve regulations of the Fire Offices Committee (FOC), in be the Fire & Extended Perils policy wording and conduct nosy. Tn 1982 the FOC made ARPT available to commercial ufacturing risks. fe dissolution of the FOC and its replacement by a much Brganisation, the Association OF British Insurers (ABI), orgete companies operating in the market were free to promote their own policy wordings « 4In 1986 the ABI produced standard recommended Fire and All Risks forms to be used by members but the latter were not bound to use them in their| original text. Indeed, even the title "AIL Risks" hue becone optional since meny companies devised their own titles, like !Multi Risks Insurance", "Asset Protection Policy", etc. They have also revised the ASI forms to suit their own peeleting policy especially for the smal] and medium sized risks. Dit, gas and petrochemical risks (hereinafter "oil") are not norma!ly insured under a ‘standard policy form, In fact, there tone standard form as such. While the known oi1 insurance Yeaders, in London and Europe, have a core policy wording, it is Hnuariably revised by risk managers and international brokers to sya ee tocaific needs of the insureds. The advantage of this sae cording, however, is that it is readily identifiable, when it core erred to by underwriters, brokers and others. In this sense, it acts as a useful source of reference. the all risks concept has and is st{l] undergoing changes most of ine eine directed oy Brokers and risk managers towards widening the scope of cover. The instrument for achieving broader eRverage is the manuscript all risks policy, prepared by major So) ingureds| or their consultants and brokers. The AIT Risks Concept Named Perilg v. AIT Risks The all rishs concept is very simple: instead of naming the ieriis to be insured, e.g. fir2, Vightning, explosion, flood, earthquake, etc., the ARPI policy provides insurance against all perils and risks causing 1oss 9° damage, to the physical assets of the insured. Unlike a Fire poli where the additional perils have to be named, the ARPI policy saves the insured from the potential trap of forgetting to name a peril and also removes the heavy concern with unexpected and unforeseen physical loss or damage. The latter, of course, encompasses the entire undefined damages accidental damage which is not attributable to fire or to one of the other commonly nsured perils. In this sense, ARPI is one oF vvactive and more comprehensive than other property insurance forms.Insuring Agreement The operative clause of ARPI, in one "standard" policy form, reads as follows+ this insurance is to indemnify the Insured against. sudden and raetgental physical loss cr damage to all property, declared in the Schedule of the Policy, attributable to any cause shatsoaver except as hereinafter provided. This clause sets out the insuring agreement: to provide cover against ail risks of physical Toss or damage, but the exclusion aaa rens of the policy contains two distinct lists of excluded perils and) excluded property. the insuring clause must always be read in conjunction with the Tre iesonse The clause suns up the thrust of ARPT in five carefully chosen elements: = sudden and accidental = physigal loss or damage 1 Gropetty declared for insurance ~ any cause whatsoever - = exceptions Criticizing ARPT unite the, first three elements can pass without much criticism, the "any [cause whatsoever" and the ‘axceptions" give rise to negative conments. The exclusions are generally looked upon as & petrayal of the "all risks", tne any cause whatsoever, coverage promise of the insuring dereenent, Such a comment is not ertirely fair especially when it, is pronounced by those who cree better appreciate the implications of the all risk Concept.| The concept is amena>le to improvements, and both the soared knd brokers have negotiated extens ve jmprovements, but there isa limit as to how far it can be extended. In this Fespect the following points may help in clarifying the Tee ctions imposed on realisiag the full and complete intention of the concept. 1. The [readiness of insurers to grant jmprovements. The ne eae epay be_2 function of the rate or the deductible or read nest ior of Liability arising from one occurrence;the readiness is a1so connected with the availability of treaty reinsurance. proportional treaty protection not teeily available hence the recourse to facultative and excess [of loss protection. [beclarat ion of ARPI under @ Five Reinautance Treaty]. 2, The willingness of the insured to meet the possible extra ree Of buying-back sone of the exclusions, e-g- machinery breakdown or sabotage and terrorism. 3, The degree to which the specific coverage required meets the rect for insurabi lity, @-9- how far the concept can be tetended to include normal wear ene tear or gradual seepage ‘and pollution? The general test will be one of establishing if it is commercially realistic t ne ise the literal meaning of tal risk’. Such @ realisation wilt eventaully result in the Failure of insurers to reneln Yolvent. Hence the need for exclusions and some qual mein Song. to ensure a degree of tertainty over the outcome Gf probabie insurable events. reversing the Onus of Proof in the context of the exclusions contained in the policy, if 15 in ethwbile to bear in mind the Special characteristic of ARPL weieh ig the reversal of the Ben of proof. Unlike named perils insurances where tho insured is required to Prone that a Recs is covered by one Of the insured perits, under ARPL the jnsured has only to Henonstrat2 that a fortuitous Joss had taken Tace. | Thus, the burden fs shifted to the insurer to prove that the loss falls under one of the Jisted exclusions. ARPT Exclusions and Scope of Coverage The ex¢lusions of an ARPT fal) into two categories: _ exclusion of certain types of property ~ Belision of certain perils [causes or contingencies} fh quiek method to Judge the Scots of coverage provided by an ART policy is first to wegt jeally read the operative clause and then Bor nihe the exclusions, Thus i ‘the operative clause, and for that matter the terms for nus syucing the exclusions, have te be net tully read to check the presense of words that restrict the application of cover, @-G5 werectly or indirectly". The yause in one ARPT policy contains such a limitation: 4 operative ©The Insurers agree +++ red in respect of physical destruction of or damage to sudden and accidental the propeety more fully described in the S tirectly and wholly Lempnasis Dided - MGAK] attributable to any cause, except 2s eer provided, occurring during the currency of the po [industrial ANI Risks PoTiey yordiing for O11 Risks. P further be broken down into 3 The exclusions can the following categories: verits operating gradually im [directly] causing physical joss) or damage - Trade losses» th per{1s and properties th more specific policy. are [should be] insurable under & | qnsurance market agreenent. any of. the exclusions Fan be either deleted or restricted in i the exclusions of the ARPL policy for oil application. indeed, apple are crafted to provide pilitein cover: the cover being vainly for further consegue (ee hysical Toss or damage 2r?s109 TainTyne of the exclusions. | FE cexmple, while machinery Further damage occasioned as 4 From down as such is excluded. ponsequence wil) be coveree widening the Scope of Coverage Ker is to provide @ wordings of its one of the functions of 8 professional bro the aim of this critical One Ghue of the existing insurance policy clients, be they Fire or ARPL wordings. exercise js to establish the strength and weakness of exisitng programmes and then suggest improvements; Tn the majority of sugges induly affecting the cost of insurance. cases this is done { instruments are in widening the scope of ARPT + number © available to the brokers Firgt, in the area of exclusions?_ restricting the application of exclusions by removal of convulsion of nature [tectonics]. “terrorism exclusions. Sedond, in the area of coverage: _ | introducing a series of extension | up to its promise of being an all _ | incorporating different Tevers of | ith the the hazerds involved in =| Gntroducing higher sub-limits jn respect. 0 eg. records and valuable documents, money, coverages, & expediting expenses, 26+ Outlining an ARPI Policy The structure and cot wElined in a separate paper qualifying words of renovél] er words that are not properly defined, @-9+ atmospheric disturbance [wind systems] or deletion of certain exclusiones, e.g. the earthquake and “arranging for the buying-back of some exclusions if the restriction or deletion js rejected by insurers. clauses, to make ARPI live risks poticy- deductibles commensurate the subject-matter. fF various ponents of the ARPE policy for oil risks areBrief itis Limitation The Conce OUTLINE OF AM ARPI POLICY FOR DOWNSTREAM OIL RISKS tory ny ‘on Broadening Coverage P The Coverage i (4) Essence Standard Extensions Variation of Standard Extensions Additional Extenstons ES The Exceptions qt 2 ‘ 4 | Basis of 1 B Special General Comment esting the Scope of Cover xamples of Perils or Causes ‘Type. a or Causes uses with Built-in Cover roperty eneral Comment indemnification Reinstatement Indemnity onditions onditions n General Conditions [The wording used for this aut ine is the TOL Industrial ALT Risks Policy]ief History Evolution rom Fire and Perils London Market: Role of F.0.C. & ABI Extension Ali Eme 10 Land-based O11 Assets xborough Vapour Cloud Explosion (1974) ence of EML Concept and Industrial All Risks Policy for Oi] Assets and the role of 101 (1975) Popularit: Risks cov | of AIT Risks and growth of manuscript broad-form A ers imitations on Broadening Coverage Market Av the case ‘lability f Sabotage & Terrorism ind Seepage & Pollution Premium Cost Insurabil ‘the Concept Simplicity: Focus ing Pe Pri Op Approach adop St Exy Ou The basic wor Risks Policy. ty Criteria ° no perils to be naned fon exceptions: ils Burden of Proof perty Fortuity rative Clause Exclusions ed for presentation rt with basic recognizable wording and on basic Tine broader coverage ing used for this presentation is the 101 Industrial All‘The Coverage: (1) Essence = Importance of Operative Clause sThig insurance is to indemnify the Instinct against sudden and ints ital physical loss or danage to 3)! property, declared in accigenedule of the Policy, attributable to any cause whatsoever except as hereinafter provided.” 5 sudden and accidental “| physical loss or damage "| property dectared 5 any cause whatsoever exceptions variation on the Ope wthe| Insurers agree. ... t0 Indennify the Insured in respect of Sudden and accidental physical destruction of or damage to the property more fully described (p The Schedule hereto directly and Phonly attributable to any cause, trcept as hereinafter provided, wnlireing during the currency ¢f tne povicy." || sudden and accidental. + | Ghysical destruction or damage (the word Toss is not used) - * Groperty fully described in the Schedule. . Sirectly and wholly attributable to any cause. ‘| Scouring during the currency of the policy. The Coverage: (2) Standard Extensions = Public Authorities . Additional cost of reinstatement associated with compliance with Bye-laas or Statutory Provisions. | Reinstatement must be conpleted within 12 months of the Hate of loss or as agreed Dy Insurers. _ Removal of Debris (R.0.0.) | Jo to a Timit of 10% of the Sut Insured for each item designated in the Policy Schedule.The Coverage: (3) Variation of Variations |can be ne ; Extension excludes: Clean-up costs (pollution cover) of jnsured's property or surrounding property in respect of Stocks or Products 5 Liability not exceeding Sum Insured. Tenporary Removal | For cleaning, renovation, repair or similar purpose: + on the same premises. + other premises. + in transit (other than Ocean Marine). Capita] Additions | Newly acquired buildings, machinery. | Alterations, additions and improvements to existing building, machinery. . Capping Capital Addition at any one situation: not éxeeeding 5% cf Total Sun Insured on the property in question. - Insured to provide particulars of Additions and may be required to pay Additional Premium. Fire Fighting Expenses | Capped at 1% (one percent) of Total Sum Insured (excluding Stock) but not exceeding US$ 1,000,000. andard Extensions stiated to remove limitations in the Standard Extensions, e.g. Publi¢ Authorities i) o-define time limitation on reinstatement.(54) | introduce element of cover for property not destroyed but allowed for when reinstatement at another site is carved out. (3) ensure that sub-limit is in respect of each and every loss. (ii) | introduce element of pollution cover, - Capital Addition (i) remove limitation of 5% on value of Addition. (45) allow smail Additions at no Additional Premium. (ii1) Adjust Sum Insured at exsiry at 50% of Policy Rate. Host useful to waive Average. - Fire Fighting (1) remove capping. (ii) lintreduce Sue and Labour. The Covera (4) Additional Extens; ~ Bubs limit for personal effects of employees, visitors, Customers, ~ Property of others held in trust cr on commission and generally under the care, custody and control of insured. - Sub-limit for Records and Valuable Documents. - Sub-Timit for Money. - Computer Records. - Expediting Expenses. - Architects and Surveyors’ Fees.(1) Testing Scope of Cover Like other insurance policies 2° A11 Risks Policy has to be gxamined in its entirety. fm easy and quick method £07 judging the scope of the all risks An Grage ig to examine the Txeeptions of the policy. exceptions are nade by insurers, therefore insurers have to establish if & 108s OF danage falls under the Policy's exceptions: ae fxceptions: (2) Type Exception of Perils or causes ov Cont ngencies. Exception of Property: fhe Except ons: (3) Perils or Cal _ perils operating af2 a loss of damage. - Trading }osses« _ qnsurable under 2 more specific policy _ Insurange market agreement. ine-txentians: f)Bsampes.of Perils. ESS | garthquake, volcanic eruption ‘or other convulsion of nature) + - Typhoon, hurricane, tornado, cyclone {or other atmospheric disturbance) - _— garning of forests, Pampas: whether accidental or otherwise. - War. Terrorism.political causes: nationalisation, confiscation. NucTear weapons material and jonising radiation. Impact by ship or other water-borne craft. peliberate operation of machinery, pipeline, etc. in excess of design capacity: failure of supplies: water, 985, electricity, fuel- _ — Subsidende, shrinkage, expansion or erosion of soil. = defective parts, coriais, workmanship, design or defect or omission) in design or spec ‘fication or latent defect. _ Flaring pf products = Leakage or overflowing of the contents of any storage U vessel dr other container. _ pirect or indirect Seepage, pollution and Contamination. pptions: (5) Causes with Built-in Gover _ ear and tear, gradual deterioration, rusting, corrosion: metal fatigue, oxidation. | Fermentation, evaporation, 108s of weight, contamination, or thangelin quality (except whore such is directly caused MY 2° chatrence not excluded by the poticy) + _ Failure, breakdown, malfunction, derangement, collapse or rupture of any mechanical oF eiectrical or electronic machine or equipitent. | ghortecircuiting, self-heating: leakage or surge of electrical Zurrent, over-loading oF excessive powers the built-in cover in these exceptions (nost of which arg insurable ihGer a Machinery Breakdown policy) isin respect Of further damage OF under jetign arising in consequence of the exceptions listed. 13ixceptions: (6) Property “he Standard #11 Risks policy has a list of 11 types of property that are excluded from cover. cash, coins, precious stones, works of art, BookS of account, computer records or data manuscripts, plans, drawings or designs, patterns. property lin the course of construction or erection or dismantling or being tested or commissioned. road vehicles, railway rolling stock, water-borne vessels or airborne craft. animals and other living creatures. standing timber or growing crops. land, draining work, culverts. roads, pavements, driveways, railing lines. cores Pans, reservoirs, piers, bridges, wharves, bridges, docks or tunnels. underground or offshore property. foundations. property in transit. catalysts and consumable materials in process, production or manufacture. property insurable by a more specific policy. Exceptions: (7) General Comment excepted Causes and Excepted Property can be, either revised to restrict their scope, or deleted alt gether. Examples on Excepted Causes Earthquake - can be covered subject to a sub-limit or no limit if Jocatian of property is acceptable. [4Terrorism - as above. Nuclear exclusion - restricted so that certain types of isotopes can be covered. Impact by ship - can be covered if value of property exposed is incidental. Subsidence, settlement - restricted so that further destruction of property is covered. Ex¢eptions associated with Machinery Breakdown - more extensive cover can be built into exceptions Subject to a sub-limit. Pollution - restricted to gradual. Examples on Excepted Property Exceptions can be radically restricted to ensure cover for: books of account, computer records, drawings. course of construction. piers, docks, roads. foundations. goods in transit. catalysts, especially regenerated. Basis of Indemnification () Restoration or replacenent of damaged or destroyed property with new property to a condition equal to but not better or more extensive than its condition when new, je. improvements are not allowed. The question of under-insurance and the application of average- \5(2) Indennification calculated on the basis of the value of the property damaged or destroyed immediately before the occurrence, due allowance being made for depreciation: age, use and condition. Average is also applied if the value of the property insured et the time of destruction is greater than the Sum Insured. Special Conditions (Standard) Special Condit Stock Declaration and Adjustment Floating Stock Deposit Premium Declaration and Adjustment Ayerage Deduct ibles The need for deductibles and their relation to Rating Type of deductibles Long Term Agreement (L.T.A.) s_(Non-Standard) Sometimes identified as Provisions. These can be negotiated to suit the requirement of the insured, Examples Gurrency for Premium/Claim Payments. Governing Law and Jurisdiction. 72-hour Clause. Stage Payment of Claims. 16ANT Risks Property Insurance = No Claim Bonus (N.C.B.) - Breach of Warranty~ _ privilege to appoint own assessor/adjuster. General Conditions These are standard and found in other policies. 1. Material facts Avoidance of Vabitity if there 1s: (i) Material misdescription of property, trade or process+ (14) Hisrepresentation of material facts essential for estimating the risk. (iii) Omission to state such facts. 2. Change in Risk (i) Untess changes resulting in increasing risk of destruction or Jamage are reported to Insurers insurance in respect of such destruction or damage is denied to the insured. (J4) Change must be agreed by endorsement. Cancellation - 30 days noti | can be changed to 60 days or 90 days. 4. Other Insurances Introducing contribution. Review primary cover and non-contribution. 5. Claims Procedure _ Tine Vimit on notification {1ANT Risks Property Insurance ~ No Claim Bonus (N.C.B-) - Breach of Warranty. _ privilege to appoint own assessor/adjusters General Conditions These ave standard and found in other policies. 1. Material Facts avoidance of liability if there ist (4), Material misdescriation of property, trade or process. (ii) Misrepresentation of material facts essential for . estimating the risk. (444) omission to state such facts. Risk (i) Untess changes resulting if increasing risk of destruction or aamage are reported to Insurers, insurance in respect of such destruction or damage 1S denied to the insured. 2, Change in (ii) Change must be agreed by endorsement. 3. Cancellation - 30 days notice. = can be changed to 60 days or 90 days. Introducing contribution. Review primary cover and non-contripution. 5. Claims Procedure - Time limit on notificationpmissdon of claim in 8 ting: items maged/aestroyed ene Mey value at the time of damage potaita of any other insurances - _ Supporting documents to be produced by insured at own expense pue Diligence _ insured to act deligently- | qainimise extent of danage/destruction- | Rowers | take, possession oF property: examine, remove such proserty: gel such property: 3. nS jvance of L 9. eplace instead of paying. Lf Insurers evect 0 peinstate/replaces Insured to submit 9 ans [specifications _ Insurer's not pound to reinstate/replace exactly oF cempietely but only SS el eumstances perme» yo. Subrogatt standard. waiver against selected parties: \Gll. Arbitration - Standard. - | Other formulations. 12. Time Bar - | Insurers’ liability ceases after 12 months from date of damage/destruction unless claim is subject to pending legal action or arbitration. Comment, on General Conditions - Standard and can be found in other policies. - Not all of them are necessarily suitable to oil and petrochemical ribks. = Some of these are oppressive, hence will be suaject to negotiation. = Some are made to be condition precedent to liability.q COMPANY Ist International Oil and Gas Seminar On Management of Oil and Gas Risks ” 9th & 10th April 1996 Under The Patronage of Minister of Economic and international Cooperation ENCOME ENSUE SS COMPANIES PRESENTED BY 1 MR, MOHAMED SADEK TREASURY GEN. MANAGER OF tab ab sit * Pe PROLEUM COMPANY SE PCO” Venue : MISR INSURANCE BUILDING 44.4 EL DOKKI st., Giza Valaat Harb Conference Room* Introduction When a business 15 forced into a total or partial shutdown because of damage inflicted by a fire, a severe storm or some other peril, the indirect consequences are often as costly as the obvious costs involved in re- building or replacing the damaged property ‘The potential for profits could be wiped out At the same time payroll e to be met and certain other fixed expenses may entitigments may ha continue, business interruption insurance is designed to fill his paps: 1 reimburse the business for lost income and for continuing expenses such as payroll, rent payments and continuing, utility expenses. ‘These are various types of business interruption insurance designed to mect specific needs. For example, in addition to the all risk insurance of the drilling rig, a maximum of 25% of the rig value can be insured against anticipated earnings which is the amount that the rig is expected to earn for its owners during the 12 month policy pertodIn the. oil companies business, (i.e, exploration and production companies), additional coverage called “ Loss of Production Income? could he added to the property all risks insurance and the well control Insurance. In order to highlight the importance of this type of insurance in the ofl business, I will concentrate in this paper on the offshore oil operations whereby risk of loss is obviously high In this regard, it ig worthy to mention that more than 80% of oil production in Egypt is coming from offshore fields * The Offshore Risks |As you are aware, the offshore operations in the oil business is extremely risky than the onshore. While each onshore oil/gas well is far from the other wells, usually more than one well (may reach to 60) are existing on one offshore platform. Thus, if the platform is damaged or lost, almost all its wells will be shutdown, and a severe loss of production will occur. Same thing will happen if one of its wells will be for any reason’ out of control - (fire or blowout), ‘The production losses in such cases vould be more disastrous if other offshore platforms in the field are connected with the damaged one. More detalied instances will be provided in the scope of coverage topic* Coverage (Theory behind) If we talk about the loss of production income insurance as it relates to the major lines of insurance (i.e. damages insurance & monetary insurance) we Will find subject type as one of the damages insurance (i.e. contract of indemnity), in other words, it compensates the assured for real losses incurred despite the fact that the oil is not physically lost but only prevented from being produced This type of insurance is similar to the loss of profit insurance in the other industries which is so sound and usually purchased thru conscious risk management programs ‘Thus, the profit exposed to loss in other industries equals the income or revenue in the oil companies sector. If you look at the oil industry in its first phase ( exploration and production) you will note that big investments are usually incurred first (non cash cost) and then minor relatively expenses incurred (cash cost) to produce oil barrels ready for salé. On the contrary, the production process in the other industries shows a relatively balance between the capital and operating costs and thus, profit will be gained versus revenue or income in the oil companies ‘operations.The ultimate goal of this quick analysis is to reply the common inaccurate statement which says that as long as the oil is still underground, no real losses will be sustained by the oil company in case of production shutdown and consequently, there is no need to purchase loss of production insurance! * Scope of erage As provided in the preceding topics, there are various types of business interruption insurance designed to meet particular needs of different kinds of busihess operations or to deal with special circumstances. One of those is the loss of production income insurance for the oil companies This type of coverage is designed to compensate the assured for lost income, earnings or/tevenue which results from shutting down the oil wells of reducing the production because of an accident covered under the property all risk coverage or the cost of well control coverage. In other words, to indemnify the assured for the deferred oil that the assured would have produce had the loss not occurred. ‘The period of such coverage is normally 12 months starting from the date of Joss and continuing for such period irrespective of the policy expiration date, Excess coverage may be purchased for additional one or two years if the case is so warrantsCoverage also could be broadened thru a tailor made wording as usually provided within a world-wide insurance arrangeemnts for the big oil companies to include: - Lost earnings resulting from any loss or damage to the onshore downstream facilities which are not covered under the offshore physical damage insurance but rather, under the onshore one, For example, you will be compelled to make partial or total shutdown for the offshore wells if the tank farm area or the process area damaged or destroyed because of fire / explosion accident , and then alot of earnings will be lost for a long period - Loss of production income from wells capable of and/or planned to be producing from a completed structure within 90 days from date of loss. A completed structure here, means a structure which is insured under the physi¢al damage section of the operating policy or insured under an installation /builders risk policy if all work expect hook-up and commissioning is completed Furthermore, costs incurred by the assured for early production restoration is covered as well As a common condition under that type of insurance, insurers require diligent efforts to restore the production operations. Insurance payments apply only as long as it takes to repair or replace the damaged property, using “due diligence or dispatch” so thal production may be resumedReporting data for insurance is very technical, so that underwriters could be able to assess the tisk and then produce the proper premiums. For example, if you have several satellite platforms whereby each produces an average of 10,000 BOPD and their production goes to the onshore facilities via one production platform, you should clearly specify such fact material to underwriters, because the maximum probable loss in sich case will be occurred if the production platform, itself sustains any severe damage or loss, since wells located on subject satellites will be certainly shutting down until the damaged platform be repaired and/or replaced. Options to restore the satellite production within pipelines rerouting if possible should also be reported Because of the high risk involved under the loss of production income insurance in the offshore oil operations especially in the big oil companies of high production quantities, the insurance coverage for such big companies may require the whole capacity of the oil insurance market. Also this coverage would not be purchased separately in the insurance market, it is usually rated by the same underwriters (who insuring the physical damage and cost of well control) as a part of package insurance. As the offshore oil and gas is a relatively new class of insurance, it does not have established “ standard” policy wordings. Since the early 1950's when offshore drilling, commenced, the policy forms have developed in line with the advancement in technology used by the oil companies.This constant change in wordings is one of the reasons that there are no Published text books on the subject. Any book that was written would be out of date before it was published, Accordingly, you will find attached to this paper just a sample wording for that type of insurance. This is not intended to be the broadest avoidable, but rather is included to give a general ideas of the scope of coverage (i.e. as a kind of recapping the description of coverage provided under this topic). Valuation of deferred oil production as being the indemnity entitled to the assured under this type of insurance is simple as that:- otal barrels deferred x Price per barrel during the shutdown period (Agreed or the market price using the decline factor for same prade) Becatise there is no preset formula for loss adjustment under this type of insurance, some loss adjusters approve the total figure of the above operation, while others see that estimated cost of scheduled workover during the shutdown period should be deducted as if it was done had the accident not took place or deduct the cash cost per barrel from the total ele. Last but not least, subject type of insurance may be somewhat costly especially if the assured loss record is not good, however cost could be controlled and/or mimmized if substantial deductible amount be selected (Lc. minimum of $ 10 million per occurrence). 7On the other hand the more participants in such insurance (assureds), the less cost incurring generally on each Finally I hope the above simple presentation meets your expectation in identifying risks involved under this type of insurance and how much coverage is worthy With my best regards to all of you, Mohamed Sadek March, 25th, 1996LOSS OF FARNINGS AND/OR REVENUE 2. Las uk PLarferm cobject Co provisions of Paragraphs 7, 8, 9 and 19 belge. 4. POLICE | TERN Noon Standard Time at location of risk. vos of earnings and/or revenue fron wells producing through Plarforn. Coverage under this insurance shalt only be in respect of of] currently in production and oil from wells which have been temporarily suspended from duction fer matntenance, work-over, reworking and Like operations. erage itl not apply to any shut-in wells, nor to wells being drilled. In respect of wells cemporarily suspended as above, coverage for loss of eotnings and/er revenue from the temporarily euspended wells will only apply fullew}ng, physical Loss or damage er following a claim under the Cost of Control and/er Seepage & Pollueton poldeses es described below arising from ay iisyied loss or danage to preperty other than the temporarily suspended wells in question. 7. party romenty This Lnsurance shall pay up to the amount dnsured for cach barrel of of} prevented from reaching Terminal or prevented from being loaded] into tankers ae a result of loss or camage to Platform, | Platform, Trunkline, | i ; and witch vould be covered by the dfrect physical a polletos covering the above facilitdes and/or folloving a claim cae fn resp: under Cost of Control and/or Seepage & Pollution policies effected eet al vells8. 7ee| oF By to pay up days cach platform excess of consecutive days rach/piatéom any one accident or occurrence but maximum dafly amount (100%) 8. AGGREGATT LINTTATIC ‘a elie event of Loss oF damage which produces a claim hereunder, the maximum I Pi amount recoverable is as follows Vo. RPTURA Peennee {s obtained from third parties in respect of cme insured hereunder such recevery shall be the Arsured and Underwriters as their respective 1a er The Apsured shalt effect or cauee to be effected all repairs (temporary or Dermangne) whth due diligence and dispatch. Undereriters shall. have the vualit to require the Assured to ineur any expenses which would redure Wulervriters' Iabi2ity under thie tneurance provided such expenses’ tor Untersttters! aceoue 13. special, exrensye It is] agreed that tv the event of expiration of the tern of this insurance or tn fhe event of cancellation of this insurance, any well uhich 4s cue of peeducfien resulting in Joss under this insurance at time of euch {ippingeion or cancellation shall contAnue under full coverage afforded by this Adsurance unt{i such time as production can be restored. 16. COVERENL ITAL There shall be ae elim hereunder wfeh respect to loss of earnings and/or revel Cue to a Tisttacion of ofl and/or gas production by governmental vectors decree, order, reguintton oF snjunction or by similar ncte of anya. ERM) OF PAYMENT: To pay vp to days each platform excess of consecutive days cach platform any one aceldent or occurrence but maximum daily amount (1002) cach platform LON: SPECIAL aGGReGATE Lantt, In che evene of loss or damage witch produces a claim hereunder, the maximum wouge receverable = follows seuss jn att cases where a recovery 4s obtained from third parties in respect of Biss lof earnings ardfor revenue insured hereunder such recovery shall be jorf-oned between the Assured and Underwriters as their respective tetergses may appear ete ot The “Ascured shall effect or cause to be effected all repairs (temporary or permadenc) with due diligence and dispatch, Underwriters shall have the right | te require che Assured to incur any expenses which vould reduce (nderdrivers’ Mabiiity under this insurance provided. such expenses for Mnderdriters' account KEENSION ¢ 1s del agreed that £2 the event of expiration of the term of this insurance er tn the event of easezlation of thts insurance, any well uhich te out of production resulting in Joss ander thts insurance at tine of such frrminativn or cacveliation shall continue under Full coverage afforded by th$s thsurance unt] suck time as preduction can be restored. BOCERRHLEZAL ACT Eon Wwre | shall te no ciate hereunder with respect to loss of earnings and/or revenue due to a Mimitation of cf] and/or gas production by governmental action, decree, order, regulation or injunction or by etmilar acts of any povernment, .Is. 18. 19 RATION © the Assured and the Underwrieers shall fail to agree as to the of loss cach shail, at the written demand of either, select a competent an disinterested appraiser. The appraisers shall first select a compecent and disinterested umpire, and failing for fifteen (15) days to agree upon such umpire then on request of Assured or Undervriters, such umpire shall be selected by a judge of a United States District Court. The apprnisers stall then appraise the loss and failing to sgree shall submit theif differences only to che umpire, An avard in writing of any two when file with the Wndereriters shall determine the amount of loss. Each appraiser shall be paid by the party selecting him, and the expense of apprpical and the unpire shall be paid by the parties equally. SE_AGREFNENTS au WAIVERS OF SUBROGATIO Privilege is granted the Assured to release fron Mfability any person, firm or corporation for whom or with whom the Assured 4s performing operations or ho Ls performing operations for the Assured, under contract or otherwise, provided the less or damage subject to said release arises out of or in connection with such cperations and Underwriters hereby waive rights of subrogation against the parties so released provided said release is granted priog to loss hereunder, HOTIGE OF Loss Ihe Assured shall report to Underwriters every loss or damage which may hecowe a claim under this insurance as soon as may be practicable after it becodes known ty them. PROOH_AND PAYMENT OF Loss A detailed sworn Proof of Loss shall be filed with Underwriters within sixty (60) \days from the date on which completed forms approved by the Assured are recejved from the adjuscer. | #11 adjusted claims shall be patd to the Assured within thirty (30) days ter fling Proof of Lase. TERE: ’ Notwithstanding enything contained herein to the contrary, it is understood and agreed that this insurance covers only of the Assured's interest in the anounts insured (or part of € being % part of )s prentums, special wegrepate Limitation, datly indemnity and oil production etc., provided bored, Attached Fo and forming pare of Poltey Number. Effecttve| dace Issued byt15SUEI Waces| suatl| a q and 2 A ENDORSEMENT NUMMER 1 To: Ive, Ehotanding anythlug to the contrary contained dn this insurance, there tn sw liablifey fer any elatm enused by, resulting from, or incurred as a Iqnence © 1) The deronat ton iL) Any weapon of war an explosive nused by any person acting malledously or from a political motive; ny act for political or terrorist purposes of any persons, whether or not nts of a scvereign power, and whether the loss, danage or expense lesulting therefrom is accidental or intentional. ther terms and conditions remain unchanged. ued eo and forsing part of Posley Number, -4-IWALGE COMPANY Ist International Oil and Gas Seminar On ~ Management of Oil and Gas Risks ” 9th & 10th April 1996 Under The Patronage of Minister of L.conomie and international Cooperation AND GAS MRO PRESENTED BY : MR, ABD EL MONIEM EMAM CHIEF EXECUTIVE OF PoE ENSERANCE COMPANY Venue : MISR INSURANCE BUILDING 44 A EL DOKKI st., Giza Valaat Harb Conference RoomMISR INSURANCE COMPANY IS VERY PLEASED AND HONOURED TO GAIN THE TRUST OF OIL INDUSTRY FROM THE EXPLORATION PHASE TO REFINING AND UNTIL THE DISTRIBUTION TO THE FINAL CONSUMER. THIS VERY APPRECIATED TRUST PUT US ON THE TOP OF THE EGYPTIAN INSURANCE COMPANIES OFFERING THE INSURANCE PROTECTION AND SERVICES TO THE OIL INDUSTRY FOR ALL ACTIVITIES AND THANKS TO GOD WE CAN-SAY THAT MISR INSURANCE COMPANY ALWAYS ABLE TO FULLFIL ITS OBLIGATIONS AND COMMITMENTS UP TO THE STANDARD IN SERVICES, PROTECTION AND PAYING THE CLAIMS IN THE PROPER TIME ENABLING HER CLIENTS TO RESUME THEIR OPERATIONS WITHOUT ANY FINANCIAL LOSS OR DELAY TO FULLFIL ITS‘ OBLIGATIONS MISR INSURANCE COMPANY ARMED HERESELF WITH A VERY TECHNICAL AND PROFESSIONAL TEAM BOTH IN THE DIRECT SIDE AND IN THE REINSURANCE SIDE AND DEVOTED SUBSTANTIAL PART OF HER FINANCIAL RESOURSES TO TRAIN HER STAFF AND PARTICIPATES IN ALL THE OIL AND GAS SEMINARS AND CONFERENCES ALL OVER THE WORLD.DEALING WITH OIL INDUSTRY WE DEAL WITH VERY HAZARDOUS INDUSTRY IN ALL ITS PHASES AND SURRUNDINGS “WITH COMPLICATED RISKS BOTH IN THE EXPOSURE AND THE FINANCIAL LOSS AND THEREFORE, THE RISKS SHOULD BE PROPERLY DEFINED AND - EVALUATED BEFORE SEEKING INSURANCE PROTECTION AS TO DETERMINE WHICH RISKS CAN BE RETAINED FOR NET ACCOUNT AND THOSE TO BE TRANSFERED TO INSURANCE COMPANY. OIL__ INDUSTRY PHASES _ AND CORRESPONDING INSURANCE COVERAGE 1) THE EXPLORATION PHASE A) THE MAIN STAGES - SITE SURVEY - SEISMIC STUDIES - EXPLORATION DRILLING - TESTING OF WELLS - APPRAISAL DRILLING - INSTALLATION OF PRODUCTION FACILITY NnB) RISKS - BLOWOUT - LOSS OR DAMAGE TO DRILLING RIGS - LOSS OF/OR DAMAGE TO DRILLING EQUIPMENT - POLLUTION - LEGAL LIABILITY - DRY HOLE - LOST HOLE - WRECK REMOVAL C) INSURANCE COVER - PHYSICAL LOSS OR DAMAGE TO DRILLING RIGS BARGES AND EQUIPMENT - PROPERTY DAMAGE TO SITE FACILITIES - CONTROL OF WELL INCLUDING ALL LOSSES UP TO THE WELL IS RETURNED TO SAME STATUS THAT EXISTED IMMEDIATELY BEFORE THE INCIDENT. - SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT - COMPREHENSIVE GENERAL LIABILITY. - P& | COVERAGE 2) THE PRODUCTION PHASE A) RISKS LOSS OR DAMAGE TO THE FOLLOWING:- 3- PLATFORMS AND ALL ASSOCIATED EQUIPMENT. - PIPELINES. - FLOATING PRODUCTION FACILITIES INCLUDING ACCOMMODATION - ONSHORE PROCESS FACILITIES - WELL OUT OF CONTROL - SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT. - LEGAL LIABILITY TO OTHER PARTIES. B) INSURANCE COVER + PHYSICAL LOSS OR DAMAGE TO PROPERTIES + CONTROL OF WELL INCLUDING ALL LOSSES UP TO THE WELL IS RETURNED TO SAME PRODUCING OR SIMILAR STATUS THAT EXISTED IMMEDIATELY BEFORE THE INCIDENT ACCURED. - SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT ~ COMPREHENSIVE GENERAL LIABILITY =P & | COVER IN CASE IF FLOATING STORAGE VESSEL. + CRUDE OIL DURING STORAGE AND TRANS- PORTATIONOIL. INDUSTRY FEATURE AND ATTAINABLE CRITERIA IN INSURANCE COMPANY AS WE PREVIOUSLY MENTIONED OIL INDUSTRY INVOLVES VERY COMPLICATED RISKS EITHER IN EXPOSURE OR THE FINANCIAL LOSS INVOLVED AND DUE TO THE SUBSTANTIAL INVESTEMENTS IN THIS INDUSTRY A VERY IMPORTANT CRITERIA SHOULD BE ATTAINED IN ANY INSURANCE COMPANY CHOOSEN TO TRANSFER THE RISKS TO IT AS TO ENSURE THAT THE CHOSEN INSURANCE COMPANY IS VERY SOLVENT AND FINANCIALLY CAPABLE TO MEET THE MAXIMUM LOSS INSURED AGAINST. WHEN YOU CHOOSE THE INSURANCE COMPANY YOU MUST BE SURE THAT YOU HAVE ENTRUSTED THE COMPANY WITH YOUR ASSETS AND YOU ARE SAFE AND CONFIDENT TO MAKE FULL REIMBERSMENT OF YOUR LOSS. ALSO, WHAT LEVEL OF SERVICES THIS COMPANY IS ABLE TO OFFER AS A SOURCE OF GOOD ADVICE WE SET HERE SOME BASIC CRITERIA SHOULD BE ATTAINABLE IN YOUR INSURANCE COMPANY:-1) PROFESSIONALISM 2) CERTIFIED GOOD EXPERIENCE 3) STRONG WORLD WIDE CONNECTIONS 4) FINANCIAL STRENGTH 5) RISK CARRIER COMPANY TO ILLUSTRATE THE EXPOSURE OF OIL RISKS LOSSES | ATTACHED HEREWITH STATISTIC SHOWING WORLD WIDE PLATFORM LOSSES OCCURRED SINCE 1972 FROM WHICH YOU WILL SEE THE FOLLOWING - AVERAGE LOSSES BY YEAR AMOUNTING $ 243,452,491 - AVERAGE BY CLAIM AMOUNTING $ 14,320,735. 6MISR INSURANCE COMPANY WORLDWIDE PLATFORM LOSSES EXCLUDING PIPER ALPHA | YEAR OF LOSS TOTAL USS #INCIDENTS _| 1972 3.010.000 1 [1973 26.106.000 3 _ 1974 76,940,011 5 1975 104,303,395, 7 | 1976 78,951,613 12 [1977 71,061,488 13 1978 __ 126,291,583 17 1979 _ 128,326,270 17 _| 1980 ___ 188,563,783 20 198t ___ 135,857,831 22 [1982 _ 402,572,266 38 1983 _ 256,949,439 31 1984 _ 205,040,647 9 1985 _ _ 239,991,368 27 1986 _ 151,575,565 23 1987 _ 521,875,103 _ 19 1988 434,126,077 _ 20 (1989 1,056,982,098 23 | 98,258,421 18 __ 403,335,899 21 403,105,014 28 262,172,968 14 _ 51,302,936 7 _ 14,160,000 3 | 5,842,859,775 408 Average by ye _ 2,491 18 [Average by claim 14,320,735 _‘THE LESSONS OF KUWAIT Kuvatt 011 Fires Produce Innovations in Well Control operations by + William Abel, Ralph WV, Dean, James R. dunt, Jr, ABEL Engincering/Well Control Co. Houston, Texas USA ai February of 1991, the devastation to the o11 fields and following the hostilities of the Gulf var, presented a unique challenge to the veel control industry. The presence of the vorld's eight leading commercial vell control companies and seven national vell control organisations Provided an opportunity to compare the methods of each organization and advance the knovledge of oilvell firefighting technology, In Kuvelt and the Neutral Zone between Kuvait and Saudi Arabia, approximately 77 Yoide vere left burning or flowing, Each vell had been severely damaged by guplosives packed around the Christmas trees. Through the largest gathering of equipment and blovout specialists in the history of san the fires were extinguished and the vells vere capped vithin eight monehs” Scope of York To everyone who entered the fields the situation vas totally Ulsheartening due to the magnitude and extent of the destruction, The gpstacies that the firefighters encountered were even more starting. fie Hirst impression of most men vas that they had been transported’ co fell. |The atmosphere vas massive vell fires In every direction, Sduelching heat, and total blackness brought on by the thick clouds of fnoke that obliterated the sun and rained oil onto the land. Access to fhe burning vells vas limited by lakes of ofl, large area of ground Fae an huge Mounds of coke deposited around the burning wes and lastly the uncertainty of unexploded ordinance left by the var. gheez determination and the villingness to face danger and adversity vere Key elements in overcoming the hardships experienced throughout the Project. Firefighters, especially of the oil ficld variety, ares special breed. Despite the associated dangers that come vith tne territory, most firefighters love their work. This overvhelming desire te face the challenge vas the most significant factor that overcane the obstacles. By no means did the firefighters do this task alone. They vere supported by a massive organization headed by Bechtel which tncladed skilled occupations from equipment operators and office staff down to upskilled houseboys vho cleaned the o11 soaked coveralls or made the beds. From conditions immediately after cessation of hostilities te 4s ehsy to see why early predictions for the well control operations vere Placed at between two to five years. the original four firefight ine gpmpantes faced many hardships that greatly hindered normal prosesc, Kuwait was stripped of all equipment, goods and services ‘Note: This nunber varies somevhat depending on the source, the Kuvait O41 Co. has published the figure of 727, and since ABEL Engineering operated both in Kuvait and’ the Neutral Zone, operated by Getty 011, the 30 blovout vells in the Neutral Zone's Wafza Project have been added to arrive at the total of 157 vells, 01390/(1)stobecehg LE:NSE ROE until July 1991 thay sect Prog: veld coat coh refsshting effort. Around the fica? of Well control teams, including ABEL Engineering/Ve1l Kavale, yitgghe influx of nev teams cane a fined 01 Auvadt. | By mid August of 1991 most of ome logistica: called the At i$ Peak sone 10,000 nen vere cosstts saljed the Al-avda Project. The largest Ton-militar; Rerait blockade vas undertaken to deliver once 5500 Kuvait. An additional 140,000 tong of equipment vere delivered by sea, source totnehe AbcAvda veil control profess eet been estimated by press Sources to have been some 1.8 to 2.2 biliton dollars, Well Control Technology The Presence of fifteen individual vell control organizations from around cnrecrad Working side by side on wells sf e similar nature gave an developeg ted opportunity to compare methods san tools. The techniques dee gored over the years by individuals ech a Red Adair vere clearly tn be conrcarsous Stages by most all the teams “me huge number of yells to be controlled made it necessary to takes careful look at these Pees at Felation to nev ideas and advances Sf technology tnete of, tats comparison, several vell catee companies including ASEL sering adopted never techniques. tools ang Practices that greatly ineteased the efficiency of thetr operations® Access to the Yellhead The first obstacle cneountered by the Mrefighters vas the free access to the wellhead. Often there vere oii accumulations that surrounded th making dt unstable, material vas ofl to gain ace caliche as it is dled in other areas became universal The vse of water to control the ere eee T¢,0ften aggravated the problem by flushing out more oil to feed creepers’ Foam techniques similar to tndeveess firefighting were yed on larger ground fires. puce access to the area around the vell vag established, the unique Problem of coke accumulations around the wellhead became a seringerstion. Sometimes the mounds of este completely covered the yellhead and obstructed the flow from the well. To gain access to the Gulaeis Of the wellhead, the coke deposits fet to be removed. It was fuiskly jeazned that the coke presented oehes problems. It was very Fo cera not Only retained ofl and vater bat hed an ineredible abllity fe -tetain heat at temperatures high enough to retgnite a yell, Initial giforts vere devoted to extinguishing the fire and cooling the coke until it could be broken up by SxPlosives, scraping tools attached to the Athey (j280n boom or digging it out with track hoes. As time passed it vas Giscovered that 1 vas often easier ts Protect the track hoe vith heat shields and a blanket of vater and dig out the coke vhile the yell was on fire. The manner the coke vas handles may have differed from well to felt but genecally the teams were able ro establish a routine that would [ Pffectively combat the problem, f 0139072)Rxtfnguishing the Fire : Water vas the essential ingredient to cool the ground, protect the firefighters and equipment and extinguish the vell fire. A reliable vatek supply was one of the greatest roadblocks that had to be overcome by the support organization for the initial group of firefighters. To tasolve the problem, pipelines that once carried Kuvait's oil to the persdan Gulf for export to the world vere converted to transport seavater pack to the ofl fields to Zight the fires, A maze of temporary pipelines page installed to make the final link to the lined earthen pits that held the water for use on individual wells, Besides its use for a cooling agent water proved to be the most effective means of extinguishing the fires. If enough water vas directed to the fire by high volume monitors mounted in metal sheathed sheds near the vell, the fire vould go out. The major dravback to the use of vater vas the case vhere the flanes vere not directed in a single vertical column, In those cases of lateral flows, very large quantities of water were required or the vellhead had to be removed vhile the vell vas burning. ‘A very dramatic and traditional method of extinguishing a vell fire has been the use of explosives, An explosion consumes all the oxygen in its yieinity, thereby depriving the fire of one of its major components, hig combined with the dynamics of the explosion extinguishes the fire. a dentioned earlier explosives vere sometimes used in dealing vith the coke mounds. Explosives vere used by many teams routinely the experience of ABEL Engineering and several other organizations this hetliod vas deemed unnecessary vhen other controllable methods vere available without the risks and possible side effects of explosives. Several pieces of new technology surfaced in Kuwait during the firefighting effort. One such invention vas the Hungarian's "Big W: machine that vas designed to blov out a fire using two Mig-21 jet engines mounted on a Russian tank chassis, This piece of equipment was a favorite of the news media and received much publicity. One story aired ons major USA network television gave this contraption credit for ending the fires so soon, It vas reported to have put out five to seven vells per day. In truth, it was only used on about a dozen wells in Kuwait. fn faizness it should be pointed out that the idea for the "Big Wind" was developed by the Russians over tventy years ago and both the Russian and Romanian firefighting teams in Kuvait had single engine units mounted on trupk beds ‘hip technique is essentially a large fog nozzle, Water and chemical, if desired, 1s mixed just down stream from the Jet's exhaust nozzle. These fare directed tovard the fire and the combination of spent exhaust fumes moving at Mach 2+ and the atomized vater particles remove most of the fonditions required to sustain combustion, namely heat and fuel. The method is very efficient in maximizing the effects of the water mixed with the exhaust stream, Some disadvantages are the costs and transportability of the machine, Therefore, further refinement needs to be considered. Although the machine is an interesting innovation and a unique piece of engineering, its application in this type of vork seens limited to large Jateral directed flows. This impression may in part be due to its late arival in Kuvait and because most North American firefighting companies except ABEL Engineering refused to use 1t, The Kuwait well control hanagenent made the Hungarian “Big Wind" and crevs available to all the firefighting contractors 1f they chose to use its capabilities. The conclusion is that "turbo" techniques have an application in of vell 01390/(3) =firefighting but it may need further refinement to make it a feasible ~ future option. : FIXED GANTRY SYSTEM Hoist 800M a WRCHES HYDRAULIC 800M Hi 3 BOOM ATTACHMENTS: BOOM HOIST SYSTEM POWERPACK — JET CUTTER a. FORKS FORUFTS 7 RAKEMHOOK GROWN FOR HOISTING = = HYDRAULIC POWERED TRAC Figure 1 Hydraulic powered Athey Wagon! ABELIZER’ Athey Wagons aeaey oor the firefighting business since its infancy has been the 4 Pare gontt. Tt has a heavy duty boom attached to @ solid stee! track sere od dase that has a long tongue section, It vas positioned by mopntning the tongue to the dozer, most commonly a D-8 Catapillar of qeset ane boom's attitude waa Controlled through a gantry cable sustee larger, joraally activated by the dozer's tail winch. | Many variations of ERS device have been spamed over the years but possibly the nose this serie version was introduced by ABBL Engineering during the Kuvair reject. The self-propelled hydraulic Athey Wagon designed and built by jineering vec named the "ABELIZER," The unit's self-notivating and aan seeding capabilities with its many features vere effectively used aitine the many vell control operations by ABEL Engineering's capping team ‘h ummaty of the ABELT2ER maJor features ace shown in Figure 1 and listed below _ Conveying tools to the vellhead - Venturi tubes 2 jet cutting tools 2 Sting-in subs 2 Gaflatable packer: Snubbing on kill spools and BOP Suleting lifts (vith boos up like a crane) 1 Stabbing on BOP equipment i fi ~ ~ ~ dhnote, athey 4s 4 proper noun that over time has come to mean the I achey ttacked vehiele with a boom and gantry systen often used Bygii vell firefighters. Athey 43 actually the brand nane of a by oor) rock used £or transporting heavy lifts across rough ll terrain, 01390/(4) we‘The manceuvering capability vas most useful in the stinging operations performéd. The next most used feature vas its ability to position « capping stack over a floving vell. Through the use of its multiple hydraulic vinches the ABELIZER vas used frequently for snubbing kill spools or BOP's into place. A single man was able to operate all the lifting, snubbing, tugging and cravling functions giving it a greater degree of efficiency, safety and reliability than previously experienced by the conventional Athey vagons. This ability alone reduced a good portion of the support equipment and personnel required during conventional vell capping operations. In the future ABEL Engineering plans to expand on the initial tdea to further refine its capabilities and versatility. Removal of Dahaged Vellheads The high explosives used severely damaged all the wellheads to the extent that nothing could be salvaged and sometimes the entire vellhead had te be removed by cutting through several strings of casing. Older methods included the use of explosives, cables and even hacksavs to remove weliheads. Sometimes, it has been possible to tear the vellhead off by brute force, vhich more times than not caused additional damage and resulted in'repairs to the casing Often the explosive methods leave’ the easing or vellhead vith additional damage such as a longitudinal split in the casing or a ragged cut thet has to be trinmed off by making an additional cut. Explosive techniques are more of an art than a science and frequently involve a guessing game when trying to decide hov much to use, If the vellhead came off the first time you obviously "guessed" correctly, but 1f it failed the common Practice vas to increase the charge by 100 pounds! The cable method vorks, but often requires several days. The cable method was nothing more than a frietion cut. Wirerope or cable ts veapped around the vellhead or casing and dragged back and forth until it wears the casing in two, Depending on the number of casing strings and the presence of cement, the jobs could take from 2 to 5 days of continuous cu:ting. Other disadvantages vere that the cut was difficult to reenter once the cable was pulled out of the groove. Cable removal vas necessaty due to vear, overheating, breakage or vhen the operation was shutdown for darkness. Cable cutting could cause the casing to become egged that further hinders the capping operation. ‘The Kuvait of] fires proved to be the perfect testing ground for the abrasive jet cutter, a never and much more efficient cutting method This equipment performed vell in the removal of damaged velihesd components and trees. They possibly vere one of the most important innovations responsible for inereasing the speed of the capping operations in Kuvait. Two vendors, Halliburton and aytore, beth Provided Jet cutters in Kuvait, While both essentially use the same Process, they are very different tools. Both tools rely on a high Pressure strean of cutting fluid carrying abrasive particles to erode avay the metal and sometimes cement. 01390/(5)The Hytore equipment is an ultra-high pressure, trailer mounted, : delf-sontadned systen capable of quick mobilization and easy rig up. The fig up consisted of attaching a split tractor band or track to the Wellhead above or below the area to be cut off, This was most commonly Gone by tvo men vithout a crane, The tractor and nozzle were then positioned on the track and attached to the vater, abrasive and hydraulic cines. with the cutter positioned, the cut vas performed as illustrated in Pigure 2, The device vorks very similar to an automatic track torch use@ to bevel pipe. After the rig up @ high pressure, low volume stream of vater was pumped through the jet at the area to be cut, The vater leaves the jet nozzle with excess of 25,000 psi, Generally, the nozzle used vas a 0.75 mn ‘Maneter, man-made ruby. The calculated nozzle velocity at common pump a rate of & gpm is 2007 ft/sec (roughly equivalent to Hach 2+). The abrasive material vas conveyed to the jet body through a separate line With compressed air. The abrasive vas siphoned into the jet through a Siphon port by a Venturi action and discharged through the nozzle. Excess abrasive returns to the hopper via a return hose, In Kuvait, granulated garnet vith a hardness of 7.5 as compared to steel at 6.5 was the abrasive material used ser NOZZLE — ABRASIVE INJECTION LINE CUT ELEVATION A rac fic PRESSURE WATER LINE masasasasasac{| HYDRAULIC LINE: Figure D Cirealar cut with the ultra-high pressure anit Thg Jet could be set up in several configurations depending on the cutting requirement. In several instances, circular cuts through as many as 7 cemented strings of casing vere needed to remove a damaged Wellhead, The average time spent on this type circular cut vas between 1 and 2 hours vith many done in less than | hour. 01390/(6)To cut off a vellhead conpletely, the Jet nozzle vas pointed directly at the easing or normal to the casing surface. It then circumnavigated the casing on the track, making a complete 360 degree cut. The jet stream Gsually penetrated i5 to 18". The penetration vas highly dependent on the tracking speed. Sometimes it vas necessary to leave the inner string Gr production casing intact and peel back the outside strings of casing. This was done by setting the jet at an angle vhere the abrasive stream of cutting fluid never penetrated deeper than the thickness of the outer String, In efther case, the cut vas remotely controlled by the operator Gnd ne one vas required close to the wellhead during the cutting operation. ‘The ultra-high pressure Jet cutter was not limited to only circular casing cuts. The track could be attached to the vellhead alloving cuts fo be made under damaged valves, between flanges and to other various Configurations, One unique application of the high pressure cutting tool vas to mount the Jet on the end of a tripod stand for cutting bolts and other small diameter sections, Often the casing flange on the Yellhead vas undamaged by the explosion but the studs and nuts holding the flanges together vere flov cut, bent, melted or encrusted with coke, ‘This made renoval by conventional means very difficult or impossible. Cutting by pover hacksaw required much time, With the Jet cutter mounted on the tripod, the operator could cut the nuts off the :op or bottom of the flange In short order. The time required to cut a single API 11" 34 stud ranged between 45 seconds to 8 minutes, Sometimes the bolts could even be cut between the flanges depending on the severity of the danage. ‘The tripod arrangement is shown in Figure 3. JET NOZZLE Figured “Bolt cutting with the hand-held gun and tripod 01390/(7)‘the ultra-high pressure cutting tool did have some disadvantages that should be discussed. The tractor band had to be physically attached to the wellhead or casing by the operator, When there was lateral flow or the vellhead vas on fire, this vas near impossible to do, The cut left behind vas Jagged and often irregular due in part to the light construction of the tracking frame. This posed no problems for the vork being done in Kuvait but could possibly impact other operations should this tool be considered. If the track were to be stiffened and ‘strengthened it is possible it could become too cumbersome to handle by hand, Despite these limitations, the Hytore Jet cutter proved to be a valuable asset to the capping operation in Kuvait. Halliburton's AYDRA-JET cutter vas adapted for use in Kuvait with a unique method to convey the Jet nozzles. A specialized carrier was Kesigned to be conveyed to the vell with an Abelizer or a conventional lAthey wagon boom. Tvo carriers vere employed in Kuvait. One was a Wertical cutter with a single nozzle, ‘The other a horizontal carrier with an U-shaped yoke and tvo opposing jet nozzles, In both versions, a small hydraulic motor drove long vorm serews that in turn advanced the eutters along the length of the yoke. The horizontal cutter or U-yoke is, depicted in Figure 4, To make the cut, a slurry of gelled water and 1 ppg frac sand vas pumped at 150 gpm through 3/16" nozzles at approximately 11,000 psi, The abrasive stream of high pressure slurry erodes avay the casing or vellhead like a hacksaw blade passing through a piece of pipe. Halliburton's setup required considerable more rigging up and total equipment than the Hytore unit. The dalliburton cutter could cut off a Wellhead that vas on fire or had limited access due to lateral flow as it Was conveyed at the end of a boom. This alloved the :ool to be cooled land shielded from the fire by a vater spray from the firefighting teams firevater system, Hydraulic control lines vere protected in an larrangenent that resembled a tube and shell heat exchanger. ‘The lines Were placed in tube and vater vas pumped through the tube to cool the system, Figure 4 "Horizontal U-yoke high pressure cutting arrangement™ (01390/(8)Where vere several instances in Kuvait vhere horizontal cuts of the Wellhead vere necessary due to extreme lateral flovs and fire. The vertical cutter that had a single arm Jet holder, vas used to cut off wing valves or flowlines vhen necessary, The vertical cutting time of 50-80 minutes vas comparable to Rytore's, if the rig up time vas not considered, In either position, the finished cut vas clean and smooth, The Halliburton equipment had logistical factors associated with its use, The large’ volume of fluid pumped required the use of tank trucks to supply the cutting fluid and a bulk truck to supply the sand. The high Pressure, high volume fluid discharges also required more horsepower Fesulting in a large equipment spread. On a small location extra dirt Work might be required to fit all the equipment. The tool had to be gonveyed to the wellhead by the operator's Abelizer or athey Wagon boom thereby requiring a retrofit to accommodate the carrier, The rig up time 9 several hours should be taken into consideration for the daylight only Operations, ‘The blast from the cutters could not be focused to a small grea and extended vell beyond the wellhead area, In at least one case a Fetgnition of a fire was caused vhile making a cut vhen the jet stream Penetrated a pile of coke uncovering glowing embers. Yhile all factors should be considered, both the advantages and disadvantages, these tocls far outweighed previous methods to remove damaged wellhead componeats on blowing or burning vells. is easy to gee how this new technology has helped to advance the techniques used to gontrol vildvells. Both of the cutters described here workei vell in Ruwait and between the tvo almost any conceivable cutting Jab could be complished, It vould be unfair to say that one vas better than the Gther because both seem to fit into thelr niches, Table A shows a Gomparison of the two cutters. 01390/(9)TABLE A: "HIGH PRESSURE AND ULTRA-HIGH PRESSURE CUTTING ‘TECHNIQUR COMPARTSONS™ BYTORC ULTRA-HIGH PRESSURE WALLIBURTON AYDRA-JET ‘HIGH PRESSURE pune PRessuRe DISCHARGE RATE Noz2ies PUMP UNIT currINe TRAC. RIG UP VELL gonprrr era PROTECTION GonsuaBLes OPERATIONAL STAFF 01390/(10) 30,000 Pst 3-4 GPM 0.5 to 0.7mm man-made ruby I-single unit self-contained Circular 200 Ibs, +/- eq'd attaches by hand with serev clamps approx. 1 hou! Fire extinguished personal access req'd none available stilled vater truck with filter drinking quality vater crushed garnet 4 10-12,000 Pst 84 GPM with one nozzle 170 GPM with tyo nozzles 3/16 tungsten carbide hydraulic hose/pover unit and 2-cement/frac trucks U-yoke and Vertical types 1800 1bs.+/~ crane required requires boom to convey boom refit required approx. 6 hours no personal access req'd shielded and vater cooled I-sand bulk truck 2-gelled water trucks semi-clean / brackish 40 mesh frac sand mixed at 1 ppg. 12TABLE A: "HIGH PRESSURE AND ULTRA-IGH PRESSURE CUTTING PUMP PRESSURE DISCHARG2 RATE NozzLes PUMP UNIT currine ‘TRac WELL ConDrrzons FEED WATER CONSUMABLES OPERATIC STARE 01390/¢10) TECENIQUE COMPARISONS" BYTORC LIRA-HIGH PRESSURE 30,000 Pst 3-4 GPM 0.5 to 0, 7mm man-made ruby I-single unit self-contained Circular 200 1bs.+/- ho erane req'd attaches by hand with screw clamps approx. 1 hour Fire extinguished personal access req'd none avallable distilled water truck with filter drinking quality water crushed garnet ALLIBURTON GYDRA-JET HIGH PRESSURE 10-12,000 Ps 84 GPM with one 170 GPM with two 3/16" tungsten carbide ydraulic hose/power unit and 2-cement/frac trucks U-yoke and Vertical types 1800 1bs.+/~ crane required requires boom to convey boom refit required approx, 6 hours Fire can be on no personal access req'd shielded and water cooled -sand bulk truck 2-gelled water trucks semi-clean / brackish vater 40 mesh frac sand nixed at 1 ppg 12-tinnninnanlbcstinsvonssodbomniei nisin TABLE A: "HIGH PRESSURE AND ULTRA-HIGH PRESSURE CUTTING ‘TECHNIQUE COMPARISONS" ‘EYTORC BALLIBURTON BYDRA-JET ULTRA-AIGH PRESSURE HIGH PRESSURE BUMP 30,000 Pst 10-12,000 PST. PRESSURE DISCHARGE 3-4 PM 84 GPM with one nozzle RATE 170 GPM with tvo nozzles NozaLes 0.5 to 0.7mm 3/16" man-made ruby tungsten carbide BUMP UNIT i-single unit l-hydraulic hose/power unit and self-contained 2-cement/frac trucks qurtiNg Ctrevlar U-yoke and Vertical types TRAC 200 1bs.+/- 1800 Lbs. +/~ no crane req'd crane required attaches by hand requires boon to convey with serey clamps doom refit required approx. 1 hour, approx, 6 hours WELL Fire extinguished Pire can be on Gonprrr0Ns parsonal access no personal access . req req'd IRE none available shielded and water FROTECTION cooled SUPPORT distilled vater truck L-sand bulk truck HQUIPMENT with filter Q-gelled vater trucks FRED WATER drinking quality semi-clean / brackish water water erushed garnet 40 mesh frac sand mixed at 1 ppg. OPERATIONAL 4 12 STAFF 01390/(10)SLINGS FLOW OF OL, AND GAS FULL BORE VALVE OR BOP LEVER ARM SPACER SPOOL WITH RING GASKET TACK WELDED N PLACE the spin-on technique” Capping Techniques ‘The Kuvait experience proved that the methods developed by the pioneers of the well control industry, namely Myron Kinley and others, vere the Coat effective for placing control equipment onto the vellhead. The most commonly employed methods vere the snub-on, spin-on, and stab-cn techniques. By far, the spin-on and snub-on methods were the most Ergquently used. i 01390/(11)spool consists of rigging up so a hinge can be API type flange be present on the vellhead as a embly is suspended on slings in a position flange so that one flange bolt hole aligns, This is usually done with the assistance of a crane or ADILIDER toon me hinge is created by simply installing an extra long stud and pessing it through both the target vellhead flange and the capping spook flange, Usually a short section of pipe ts fastened to the spot and BOP Assonbly so that leverage can be gained. The capping spool usually has a ring gasket tack velded in the groove. spinning on a BOP or kill effected, It requires an capping base. The capping ass just |to the side of the target FULL BORE VALVE OF BOP TAGLI PACER SPOOL WITH SING TACK WELDED IN PLACE, ‘SNUB LINES on techniques” Figare © 01390/(12)‘Although this 4s an unthinkable practice in ordinary situations, the tack” Geld ds acceptable and easily breaks loose once the flange bolts are tightened. Once the rigging 1s completed the capping action or spinning Gn is done by turning the BOP into the flow, One or to men on the end Gf the lever or pipe section can easily supply the required torque to pass the BOP through the flow and align onto the target flange. Flows hore than 20,000 BOPD (estimated) can be capped using this technique. Figure 5 describes the spin-on technique, Since this method requires men onthe end of the lever arm vhen the BOP passes through the flow, it is certain that some of the flow will be directed onto them. Depending on the ability to eliminate ignition sources and the strength of the flow, the wethod may be ill advised. Only the experience of the vell control team can determine the feasibility of this method. After the BOP is positioned, the next step is to put bolts in the flange aad hammer then up. There is no real vay to test the seal in the ring groove except to apply vell pressure. Depending on the knowledge of the Ggunhole conditions, the vell is either shut-in and bullheaded or it is killed by "Minisum Kill Techniques." The "Minimum Kill Technique” is a proprietary method employed by ABEL Engineering where reservoir parameters, vellbore geometry and kill fluid rheology are analyzed by Computer methods to derive an optimum pump schedule. ‘This allovs the well to be killed by applying the minimum vellhead pressure during the pumping operation, Minimum vellhead pressure is very important if there 1s question of dpwuhole integrity and the risk of causing an underground blowout a possibility. In Kuvait very little downhole information was made Available to the vell control teams and Judgement had to be used on the method of killing the wells once the capping operations progressed to the point that the well could be shut-in. the snub-on technique can be used when the flow is judged to be too strong for a spin-on technique or that the risk to personnel 1s too great. This methcd requires additional rigging and equipment to Accomplish but in the judgement of the authors a preferable method in jorge flows or vheve concern for personnel safety warrants. This rig up if 'Shown in Pigure 6, Here, the BOP or capping assembly is suspended by hoist lines as before but wireline cable is used to guide the assembly onto the target flange. The boom or hoist hock is positioned over the center of the vellhead in the flow as far up as possible. A tag line is Used to hold the assembly cut of the flow. The snub lines serve two purposes, One is to guide the assembly into the flow and match it up to the target flange. Secondly it provides stability so that the assembly cannot be flipped when it contacts the flow. The hoist or sling lines tay line and snub line essentially suspend the assembly in free space and allow the control team to position the capping assembly vithout fear from flow tmpingement ‘The task becomes to pay out on the tag line vhile taking up on the snub Yines, In a large flow the problem is visibility vhen the flow contacts {he assembly. The snub-on method does not necessarily require good Yissbility to land the assembly properly onto the target flange. If it 4s rigged up properly there will be no vhere else for the assembly to go éxcept onto the target flange and in proper alignment. ABEL Engineering designed a hydraulic povered and controlled vinch system’on the ABELIZER to accomplish this task with no one near the vellhead and all operations gontrolled frou @ remote panel. 01390/(13)‘The stab-on technique vas the most infrequently used metnod in Kuwait and 4c requires that the capping assembly be suspended from the end of a boom and positioned onto the wellhead. ‘This was usually reserved for the case where the vellhead had to be removed and only a casing stub vas left looking up. In those cases the capping assembly employed was a four ram stack dressed from the top dovn vith blind, blind, drilling cross vith outlet valves, pipe ram and slip ram. The assembly was positioned in the flow and lowered in place and spaced out so that the slip ram could be energized to affix the assembly to the stud, The pipe rams were inverted to allow them to seal in the direction of the applied pressure. This assembly can be used as a diverter or a pump-in device so that the flow can be either directed avay from the wellhead or closed in. Once the well is closed in, the options are to bullhead or lubricate fluid into the well to kill the pressure, Stinging to K411 Most of the vells in Kuvait vere relatively low pressure. The Lion's share of the shut-in pressures vere less than 1000 and most below 650 psi, There were exceptions in the deeper horizon wells. The low pressure shut-in pressures allowed some wells to be killed inmediately after extinguishing the fire and in some cases while the vell was on fire, This method cane to be known as "stinging to kill" simple terms it consisted of stabbing in a simple tapered steel tool or stinger to effect a metal to wetal seal vith the casing or tubing. Frequently bridging materials such as rubber, rope, rags, etc. vere pumped along vith the kill fluids to seal off leaks where a tight metal to metal seal vas not possible ‘The ABELIZER was very effective in conveying the stinging tools to the Ihead due to the Eine control allowed by the hydraulic povered track and hoisting mechanism, Stinging candidates vere flows from vellheads that had clear access to fairly undamaged tubing or casing. Severe ead damage that egged the tubing or vellhead could not be effectively controlled using this method and capping vas required to stop the flov. Pigure 7 graphically shovs how the mechanics of the stinging found that about 40% s could be killed by the stinging method. If it worked, the ed to regain complete vellhead integrity was dramatically operation, ABEL Engineering's experience in Kuva the ve. time real reduced , 01390/(14): vincilinabisetpien eo Co pemore OPERATED BALL : VALVE KILL FLUID BLOCK TEE CONVEYED BY ABELIZER BOOM METAL TO METAL SEAL, SRIDGING AGENTS’ RUBBER, ROPE. ETC: Figure 7 Stinging in to kill a low pressure well” Conclusions Nov that all the wells have been capped and the smoke has cleared, we can wet Sack and evaluate the approach, methods and techniques utilized in tHe deserts of Kuvait. Iaprovements can nov be made in an industry that Intl now has never been afforded the challenge of multiple projects Suturing back to back, When the last vell was capped, the firefighting Qdems had become the model of efficiency averaging only tvo to three days per well, How vas this enormous task completed in only eight months vhen Piriy predictions vere as high as three to five years? Vhat of the Gupecience gained in Kuwalt can be applied to future vell control Gents? Several key events answer these questions tn the following paragraphs, 01390/(15)Project Zngineering . Project Sngitecgn eiivell fixe or blovout vas rightfully treared 08 Before Myoject that had unique and one-of-a-kind facesg. Ofte the gingheent used to contro: the blowout was discarded atten the event on cquippegize that there vould never be a need for {: agsin. 2% Ruvilt, the Premae project engineering to provide support of the est0e" ch the the ee Get important factor that contributed to the conpletic® of the sine etn a shorter time than predicted. Tn simple cerns, the necessary Projecths, goods, and services vere made available to the Eirefighting matorials, gorthay could do their job without delays. These services fae seta anged from flrevater supply to sandviches for the erens ot luneh goods ringettal for capping the wells vas made avatiable vien 1" ste tine. | Hatertyeten to stiare special tools and techniques vas enacted. needed pda: abrasive Jet cutting tools complete vith crave and support For extnted anong the firefighting teams. Onsite maintenance Vos vere del so that minimal dovn tine vas experienced vich support ite Provtdehe gueh as bulldozers, cranes, and backhoes. Fuel and Tor tors cautPmgadily available and vork stoppages due to poor maintenance Were wore Securrences. After August 1991, the firefighting teams vere retorted ina fashion that alloved them total concentration on ‘he task at hand. one wight think that future events cannot possibly gain from this One wince az it is not feasible to provide similar project support To cee itvents, In essence this is true, but the key ingredient 1 the Sree phage of the control effort. The Kuvait fires vere dealt with sueckly because after a team vas rigged up to contro? a yell it not ve to "recreate the wheel" on the next vell, The equipmen* was merely save eee che next location, After a fev moves the act of demobilization moved. Fe location and mobilization to the next becane extremely from ope lotthe most important fact that sets the Kuvait tires apart from Gast Gvents 1s that the vell control equipment vas used repeatedly past events della, the rig up phase vas reduced dramatically. One thet tondeus the obvious question: "Why can't this be done on furuss events?" ponders tcesaary equipsent vas fabricated and stored in several locatsons Te the nee sty of operation shouldn't it be possible to reduce the tine Peaaiued to control future events? Events from the past could have sete ita trom this idea, In a recent offshore underground ploveu”» faving a plan of action and proper equipment could have saved months in rete urement and rig up phases. Figure 8 shove the accvat, Fite Line the Plocvgn milestones of this event, which is the most costly ver) of the MaJent in the history of the ofl industry. Note that over three contke vere spent in the rig up phase. Certainly future events can serettt trom having contingency plans and necessary vell contro) pengphent on hand zather than designing and fabricating only af ir the New Techniques Mee eer etecutting tools played a very important role in expediting the aerasttion date of the project. This nev technology atioved entire contheade with multiple strings of casing to be cut-off in minutes Te ea Se hours or even days by old methods. The cutters proved aeeeetive even under the vorst of conditions. There vere sever) qeeednees when a badly damaged vellhead vas cut-off vith little or no visivility while on fire. 01390/ (16)Another Saportant lesson to be learned fron the Kuyser experience is that smother id keep ones mind open to nev ideas and technology). Tf the one stonity arises to test a nev device or theory, survey the possibility CPE it. Hundzeds of ideas vere generated fron many differete of using if presented to the Kuvaitis, hile most vere not feasitie, 2 sources Sigasible and one or to vere good. Occasionally one of | ese fey vere uid Become a useful piece of equipment. In fact there vera over 1860 pepposals made to the Kuvaitis for vell control techniques ‘They 1200 prpposat® Matty types, unrelated industrial sources or individuals nee Sose of the "Kuvait fever". These ideas ranged from totally: wee snefpie either from an engineering or cost stand point to unsave and sees tng ideas, Host of these 1200 ideas did not make it to Kuvaits reereeetc rare ideas of merit vhich should be considered for the future |A fev af the ideas that vere not considered vere use of nuclear bobs to A fev Of ground and vellhead in one fell svoop, guided bombs that vould rustande the casing, asbestos domes to snuff out the fires. tunnels, fo colterss i ibelow the vellhead, and others, Some that might be considered te cee tndure ave rerote operated robotic machines to cap yells, (a t3 Bible solution for deep vater or extrene sour situation), spite BOt's » possipieid prevent flv impingement vhile capping, chemical methods of Thee MoeMtession, and so on, For sure some of these ideas have merit and need further evaluation. NORTH SEA UNDERGROUND BLOWOUT CONTROL EFFORT ‘by Majer Milestones Munters re T Saal North Sea underground blowout Figure 8 Wilestone chart ofan 01399/(17)The fired improved ti labor vas 4m country firefight the suppo: inereased firefight delivered staggerin, expendi tu: barrels o vas used Acquire w unnecessa successfu To sum up three key vere hire perform w Most impo a well coi preventior could be This prep by the op 01390/(16) ghting and capping techniques improved partly due to the use of ols and as a result less time per event vas needed. Extra a velcone addition to many firefighting teams. Drilling crews, ‘awaiting their rig mobilizations, vere used to give the veary rs extra work force, The actual number of teams grev as did ¢ groups and service companies, The amount of heavy equizment to the point that each team vas self-supporting. No longer did es rely on equipment to be freed up at other locations or ‘from town, Although the cost of providing this equipment vas it proved to be a vise move for the Xuvaitis. The les expedited the project by many months and saved millions of produetion. In the hands of the firefighters this equipment lo its maximum potential, So follovs lesson number three: i proper equipment to do the job. What may scom like much ly expense or even overkill may actually be the ticket to a job. After all, time is money. this betef account ve think it vould be safe to say there are lclenents in this success story, First the proper professionals for the task, Second, these professionals vere allowed to gir work, Third, the necessary logistical support was provided. tantly, if the cil industry vould make proper preparations for trol event in a similar manner as it has done with spill in the United States Gulf Coast, future vell control events jealt vith quicker and perhaps at less cost than in the pest redness could have dramatic effects to the overall risk taken