Abstract
There has been much in the press about Arctic oil exploration and the oil majors' hopes of extending the drilling season. The controversy surrounding the environmental impacts and risks associated with ice have not materialized, from a warranty/claims perspective, in the claims witnessed to date. Instead, conventional claims have been brought forth, such as ones for broken towlines, underpowered tugs with mechanical problems and heavy weather damage. This leads to the question: Is ice really the critical issue, or is it just a distraction from the conventional limitations of tows when mobilizing and demobilizing assets in the Arctic?
This paper addresses this question by identifying the key risks of Arctic exploration from a warranty/claims perspective and by determining how these risks can be mitigated in advance of exploration operations. New numerical simulation tools are providing information previously unavailable to the industry, and they are helping to mitigate claims that the insurance market often considers preventable. These tools use Monte Carlo methods to model both the return-period weather criteria and the human aspects of vessel navigation. A captain's decision mimic is used to vary route, speed, and go/no-go criteria, providing a more comprehensive picture of the risks than was previously available.
Through preemptive risk simulations and calculations for the probability of exceedance, key cut-off points can be identified to mandate mobilization and demobilization dates. By creating bespoke simulations of assets prior to mobilization, options such as safe havens, shelter, and tug selection can be addressed statistically to bring risk to acceptable levels from an underwriter's perspective. This can be used to define drilling seasons and to screen prospective asset capabilities.
