Pollution liability review: Deepwater Horizon is the trigger

01-06-2012

Alkistis Christofilou and William Sturge

The structure of the UK’s Pool Re could form the basis of a scheme to generate extra reinsurance capacity for marine pollution, argue Alkistis Christofilou and William Sturge.

The Deepwater Horizon marine pollution catastrophe has increased the offshore industry’s understanding of the amount of third party loss and damage that an oil spill can cause. Deepwater Horizon was a satellite-positioned semi-submersible drilling rig, mid-range in terms of value.

On April 20, 2010, the rig was engaged in exploratory operations on the Macondo prospect, 66 km off the coast of Louisiana. In that area, the seabed was about 1.3 km below sea level and the hydrocarbon layer containing the oil about 5.6 km below. The atmospheric pressure at this point was around 12,000 psi.

The drilling was, therefore, taking place in harsh and difficult conditions—but the offshore industry is increasingly prepared to operate in such challenging environments. A well blow-out caused an explosion and fire on the rig. Eleven workers were killed and many more were injured. The well then became a ‘sub-sea gusher’, spewing crude oil uncontrollably into the Gulf of Mexico.


UK Pool Re, IK Rokas and Partners, Carter Perry Bailey, Offshore, Marine pollution

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