Thursday, July 1, 2010

Risk Management Solutions: "BP Oil Well Site Has 40% Chance Of Being Hit by a Tropical Storm or Hurricane" (BP)

From National Underwriter:
One catastrophe risk management firm said there is more than a 40 percent chance that by the end of August, at least a tropical storm will pass over the spot where the Deepwater Horizon oil rig operated by British Petroleum once drilled into the Gulf of Mexico floor. 

In a recent report, Risk Management Solutions (RMS) analysts also concluded there is a 15 percent chance that by the end of July, a tropical storm or hurricane will pass within 100 miles of the Macondo oil well BP was using before an explosion in April sunk the rig and killed 11 workers. The well continues to spew oil into Gulf.

There is a 13 percent chance that a hurricane will pass over the oil slick now floating in the Gulf of Mexico, and a 7 percent chance of it being an intense hurricane, defined as Category 3 or above, RMS said.
The disaster at the Macondo field will become a “de facto probable maximum loss,” meaning the oil spill will have a “long-lasting impact on offshore energy insurance availability, rates and coverages,” RMS said.

Contract terms will likely be revised, rates are reportedly already higher, and the event has been at the forefront of the political agenda, RMS said....MORE