Industry Changes Necessary to Drive Production

Q: What capabilities has NRGI developed over the past 25 years and what is its core value proposition?

A: We are responsible for insuring the main contractors in the PEMEX E&P marine area. This stems from the moment PEMEX began its decentralization and in the initial exploitation of the Cantarell well, one of Mexico’s largest. This provided us with valuable experience and the management capacity that is our competitive advantage today. As well as allowing us to offer a value proposition to new players and become designated ASEA consultants, it also allows us to have command of the rules operators must comply with.

Q. What insurance trends have emerged with the opening of Mexico’s oil and gas market?

A: The Energy Reform is fostering a huge transformation across the industry. Although the results will not be evident in the short term, these changes are necessary to modernize Mexican oil and gas facilities and to drive the drilling of new offshore wells and increase production at onshore fields.

In terms of insurance, one of the biggest changes arising from the reform is the establishment of mandatory insurance for companies looking to explore and extract hydrocarbons in the country. Operators must have insurance covering civil and environmental responsibility, with the objective of protecting people, facilities and the environment.

The insurance sector must respond to the insurance needs of private companies and offer an integral scheme that includes specific coverage and amounts. This must encompass not only traditional industry coverage like construction, drilling and well control, vessel and equipment insurance but also insurance, which new regulations deem mandatory At NRGI Broker we have contributed our knowledge and experience to ASEA on a consultancy basis and we have also been responsible for insuring winners of Round One.

Q: What are the insurance, operational, safety and technical challenges faced by Round 1.4’s winners?

A:  Deepwater operations are new for Mexico and they carry great challenges in industrial safety and environmental protection. We must remember that the oil and gas industry’s worst disasters have happened at sea, as was the case with the fire and explosion on the Deepwater Horizon platform. This catastrophe had serious environmental consequences. The experience allows us to envisage the challenging environment for deepwater operators and for regulators to ensure activities are carried out under best international practices.

Q: How do the insurance needs of companies differ in onshore, shallow waters and deepwater?

A: There are no significant differences between the insurance coverage needs of operators onshore compared with shallow waters, deepwater or ultra-deepwater operators. Normally, the latter are more complex and therefore require higher insurance additions because they also require insurance for special boats and equipment used in maritime operations.

Q: What solutions does NRGI offer companies entering the onshore market?

A: Every operator has different needs corresponding to the specific characteristics of its block. At NRGI Broker we customize comprehensive insurance plans specific to the location, depth and drilling of the well, the duration of the work plan and other factors.

Q: How does NRGI Broker work directly with clients on risk management and mitigation?

A: We do not attempt to replace our clients’ risk management and regulation compliance divisions but we do try to act as a facilitator to help them comply with the applicable rules regarding environmental baselines (LBA) or the implementation of the Environmental Protection, Operative and Industrial Safety Administrative System (SASISOPA).