Our Scariest Energy Risk – Inevitability of Major Loss

Scariest Risks

Scariest Risks
The scary risks in the energy industry continue to be what they have always been: operating in hostile environments while deploying new, untested technology.

But the near miss on the Elgin platform in the North Sea earlier this year—where a gas leakage cause by a rupture of a riser failed to ignite, helped by a favourable wind direction—caused some serious reflections in the upstream market. Had that gas ignited, we might have seen another disaster on the scale of 1988’s Piper Alpha tragedy materialise.

Although the market breathed a sigh of relief, there can be no doubt that this industry is bound to suffer another major loss soon, as higher oil prices push the search for hydrocarbons into deeper water and towards more remote locations such as the Arctic and the Timor Sea.

Supply chain disruption, FPSO mooring systems, shale gas hydraulic fracturing, new engine technology for mobile drilling units—there is plenty to scare the market as 2013 approaches, even if the 2012 loss record is likely to show an improvement on 2011.

This post was part of the special feature about Our Scariest Risks, published October 29, 2012. The feature also included these other risks:

About Robin Somerville

Robin is the Business Development Director for Willis Towers Watson Natural Resources P&C based in London. With…
Categories: Energy

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