A Risk-Based Methodology For Assessing Economic Impacts From Oil Spills: A Screening Matrix Based On Habitat Features And Operational Context

Abstract

Like any other industry, in the oil and gas business accidents always cost money and can adversely affect production cost. Blow Out events can be undoubtedly recognized as the most severe accident posed by exploration and production activities, and their hazardousness and severe consequences have been dramatically confirmed by the recent Macondo Disaster The new regulatory reviews of safety directives resulted from Macondo foresee that all operators will have to ensure they have access to sufficient physical, human and financial resources to minimize the impact of a major accident. In other words companies have to demonstrate to be aware of the nature and extent of the potential liabilities resulting from oil spills and provide evidence that all necessary provisions have already been or will be made, to cover them. However it is not always easy to estimate likelihood and costs associated to severe Oil spill contaminations since a number of variable enters this complex equation such as the geographical location, type of oil, complexity of operations (deep water drilling, HP HT, workover, etc), response capability, climatic conditions including extreme weather, sensitive areas of operations (arctic, sour) This paper presents a methodology to semi-quantitatively compare the Cost of the risk of Blow Out events in different parts of the world and from a range of facilities and operations, through a Screening matrix based on Habitat features and operational context (reported on one axis of the matrix and on the other respectively). The entries of the matrix at the intersection are estimated taking into account those factors that can affect the "final bill" of an oil spill as well as likelihood of occurrence of the event and the operative life of the plants. The blow out cost screening matrix could provide useful information to the operators and help to identify the greatest potential risk for Oil spills, compare assets and areas of operations, establish priorities for investments and allocate adequate resources for a timely and efficient oil spill response