Insurance losses in the petroleum industry can arise through a variety of circumstances including equipment failures, unintended process operation events, fires, floods and other extreme natural/weather conditions. These events can often result in the loss of hydrocarbon containment, the consequences of which can include ignition, fires and explosions causing harm to personnel and widespread damage to the surrounding plant and equipment.
Our expertise covers the whole petroleum industry including upstream, midstream and downstream sectors. This includes operations from upstream onshore and offshore production and processing through to midstream refinery unit operations and downstream petrochemical production.
Given the scale and complexity of many petroleum losses, we understand the need for a rapid and responsive approach. We can undertake site inspections to assess and scope the damage to plant, production units, tankage, pipelines, equipment, machinery and the associated buildings, structures and industrial utilities. McLellan works with the insured to rapidly evaluate reinstatement proposals, including debris removal, cleaning operations and the temporary and permanent reinstatement works. We also provide initial reserve calculations and develop quantum and cost assessments of the permanent and temporary reinstatement works in order to determine the reasonableness of property damage claims. Our insurance specialists are also able to calculate and advise on the actual cash values (i.e. depreciated value).
When providing insurance advisory services, McLellan considers local issues such as legislation, codes and standards as well as the productivity, methodologies and resources available for the reinstatement works and can assist in the assessment of business interruption/operational time (production) losses including the review of operational and production data and compiling before, after and during loss scenarios. We also develop loss event timelines and critical path programmes for reinstatement works and then, where required, can monitor progress on site. We work closely with the insured by providing detailed advice on potential improvements to reinstatement timescales including the proposed logic and sequencing of completion of the repairs and reinstatement of operations and production.
We have extensive experience of reviewing process operations and operational data to advise on the commercial and operational impact of the affected plants to verify production loss claims.
With our petroleum industry knowledge, we are also able to carry out causation investigations for possible subrogation. We understand the need to obtain and review documentation from all the involved parties including technical specifications, data logs and maintenance and production records, so that we can advise our clients in a proactive manner. Our investigations can be supported by destructive and non-destructive testing of mechanical parts, material properties analysis and chemical analysis.
Petroleum industry sectors where McLellan provides insurance loss advisory services include:
Upstream – associated with:
Midstream - Petroleum - Refineries:
Downstream - Petrochemical operations: