Home |
News & Media
Strong Hurricane In Gulf Of Mexico Could Generate $65 Billion Offshore Energy Loss, Says EQECAT
September 5, 2007
Oakland, California
EQECAT, Inc., a subsidiary of ABSG Consulting Inc. (ABS Consulting), and the leading authority on extreme-risk modeling, said today that a strong hurricane like Camille, a category 5 storm, with a track through the heart of Gulf of Mexico U.S. offshore energy platforms, could generate energy producer damage and loss of more than $65 billion.
“Property damage alone could exceed $35 billion and losses due to business interruption and reduction in production capacity could add another $30 billion to the loss,” said Richard Clinton, president of EQECAT. “Industry insured losses are more difficult to estimate due to the changes in allocated insurance capacity, policy terms and limits following the large losses from 2004-2005 hurricanes, but could certainly be in the $15 billion range,” Mr. Clinton continued.
“Both the energy industry and the U.S. economy face substantial risks due to Gulf of Mexico hurricanes. The EQECAT Offshore Energy catastrophe model can help exposed parties to better understand and manage that risk,” said Mr. Clinton.
The estimates were generated by EQECAT’s new and innovative Offshore Energy model, which was designed specifically for quantifying offshore energy risk. “EQECAT has developed new modeling capabilities that enable more comprehensive loss estimates for the offshore assets than those previously available. The model takes into account waves and current, wind, tidal surge and mudslides to estimate platform and pipeline damage,” said Dr. Mahmoud Khater, EQECAT’s chief technical officer. “The vulnerabilities of the different assets were developed by ABS Consulting engineers, leveraging decades of experience in the risk assessment of offshore platforms worldwide. The damage functions were validated using extensive damage and claims data from hurricanes Ivan, Katrina and Rita,” said Dr. Khater.
“Perhaps the most innovative aspect of the EQECAT model is the ability to quantify the risk of disruption of product delivery to onshore facilities due to pipeline damage. This assessment is possible through use of a network analysis that considers pipeline connectivity, redundancy and the impact of wave scouring and mudslides to determine residual pipeline capacity after a storm. The program estimates the initial loss of oil and gas product delivery capacity, and also takes into account the time necessary to restore full delivery capability. This is the first model that will enable users to plan for all major aspects of offshore damage and loss,” said Dr. Khater.
EQECAT’s Offshore Energy model is available for immediate use. For additional information about EQECAT risk models, please visit www.eqecat.com, or call +1-510 –817-3100.
EQECAT Serves Global Clients Through Extensive WORLDCATenterprise™
Through its extreme-risk modeling software platform, WORLDCATenterprise™, EQECAT enables clients to assess and manage potential damage and loss from wind, earthquakes, flood, wildfire, and terrorism, among other perils. WORLDCATenterprise™ includes 177 natural hazard software models for 89 countries spanning six continents.
EQECAT and its parent ABSG Consulting Inc. (“ABS Consulting”) serve the global property and casualty insurance industry, major multinational corporations and financial institutions. EQECAT is known as the technical leader and innovator in the development of analysis tools and consulting services to quantify insurers’ and major corporations’ exposure to natural and man-made catastrophic risk.
EQECAT was founded in 1994 and is headquartered in Oakland, California. For additional information, please log on to www.absconsulting.com and www.EQECAT.com.
For more information, contact:
Bob Healy
EQECAT, Inc.
1-510-817-3100 | rhealy@eqecat.com
Eric R. Samansky
The Samansky Group
1-516-319-0858 | eric@samanskygroup.com
|
