Marsh -R1 Energy PackageWed, 01/20/2016 - 10:49
The worldwide insurance industry has developed coverage to cater to upstream, downstream, and midstream specific requirements in order to protect the patrimony of investors and companies associated with these activities. Sebastián Aguayo, Marine and Aviation Leader - Energy Practice of Marsh, believes that the current main drivers for the oil and gas industry in Mexico are the rounds, particularly as many of PEMEX’s investment activities have been delayed, which is a situation that is expected to continue for the next couple of years. “We decided to develop an innovative product called Marsh-R1 Energy Package aiming to serve the new needs of the market,” he explains. In this program, Marsh considered that the blocks and fields awarded in the last tender will be highly dependent on cost containment to be financially viable. Therefore, the company expected that the main concerns for companies participating in the rounds would be to comply with the contract requirements and to contain costs, which were both addressed in the insurance program.
The Marsh-R1 Energy Package is designed to help companies on the most basic level of compliance with the contract. “An important number of licensees and operators have gained experience in the Mexican market by working with PEMEX, which used to ease the companies’ concern of acquiring an insurance product,” states Aguayo. “However, they will now have to work on their own or in joint ventures with other private actors, which has motivated us to develop an insurance program that is as user-friendly as possible.” He adds that one of the main challenges given the low oil price environment is the optimization of costs. Marsh-R1 has been designed not only to comply with the CNH contract requirements, but it also oversees one of the key objectives of any insurance program, which is to protect the company’s patrimony in case of an incident.