World offshore energy loss statistics

Offshore operations present a unique set of environmental conditions and adverse exposure not observed in a land environment taking place in a confined space in a hostile environment under the constant danger of catastrophe and loss. It is possible to engineer some risks to a very low threshold of probability, but losses and unforeseen events can never be entirely eliminated because of cost considerations, the human factor, and environmental uncertainty. Risk events occur infrequently but have the potential of generating large losses, as evident by the 2005 hurricane season in the Gulf of Mexico, which was the most destructive and costliest natural disaster in the history of offshore production. The purpose of this paper is to provide a statistical assessment of energy losses in offshore basins using the Willis Energy Loss database. A description of the loss categories and causes of property damage are provided, followed by a statistical assessment of damage and loss broken out by region, cause, and loss category for the time horizon 1970–2004. The impact of the 2004–2005 hurricane season in the Gulf of Mexico is summarized.