CONTROL OF WELL INSURANCE
1. COVERAGE
The
Insurers agree, subject to the Combined Single Limits of Liability, terms and
conditions applicable to Section Two, to reimburse the Insured for
actual costs and/or expenses incurred by the Insured
A. in
regaining or attempting to regain control of any and all well(s) insured
hereunder which get(s)
out
of control, including any other well that gets out of control as a direct
result of a well insured hereunder getting out of control, but only such costs
and/or expenses incurred until the well(s) is (are) brought under control as
defined in Paragraph 2.B. of this Sub-Section A; and
B. in
extinguishing or attempting to extinguish
(i) fire above the surface of the ground or water
bottom from well(s) insured hereunder or
from
any other well(s) which are burning as a direct result of well(s) insured
hereunder getting out of control or
(ii) fire above the surface of
the ground or water bottom which may endanger the well(s)
insured hereunder.
Relief
Wells are automatically held covered under this Sub-Section subject to notice
to the Insurers as soon as possible and rates to be established by the
Insurers.
2. DEFINITIONS
A. Well
Out of Control
For
the purposes of this Insurance, a well(s) shall be deemed to be out of control
only when there is an unintended flow from the well(s) of
drilling fluid, oil, gas or water above the surface of the ground or water bottom,
(1) which flow cannot promptly be:
a. stopped by use of the equipment on site and/or
the blowout preventer, storm chokes or other
equipment required
by Warranty 1.A. in the General Conditions applicable to Sections One, Two and Three or by the warranties within Clause 15 of the
Additional General Conditions applicable to all Sub- Sections of Section Two; or
b. stopped by increasing the
weight by volume of drilling fluid or by the use of other conditioning
materials in the well(s); or
c. safely diverted into production;
or
(2) which flow is declared to be out of control by
the appropriate regulatory authority.
Nevertheless,
and for the purposes of this Insurance, a well shall not be deemed out of
control
solely because of the existence or occurrence of a flow
of oil, gas or water into the well bore
which can, within a reasonable period of time, be
circulated out or bled off through the surface
controls.
B. Well Brought under Control
A well(s) deemed out of control in
accordance with Paragraph 2.A. of this Sub-Section A shall, for
the purposes of this Insurance, be deemed to
be brought under control at the time that:
(1) the flow giving rise to a claim hereunder stops,
is stopped or can be safely stopped; or
(2) the drilling, deepening, servicing, working over,
completing, reconditioning or other similar
operation(s)
taking place in the well(s) immediately prior to the occurrence giving rise to
a claim hereunder is (are) resumed or can be resumed; or
(3) the well(s) is (are) or can be returned to the
same producing, shut-in or other similar status that
existed immediately prior to the occurrence giving rise to a claim
hereunder; or
(4) the flow giving rise to a claim hereunder is or
can be safely diverted into production;
whichever
shall first occur, unless the well(s) continues at that time to be declared out
of control by the appropriate regulatory authority, in
which case, for the purposes of this Insurance, the well(s) shall be deemed to
be brought under control when such authority ceases to designate the well(s) as being out of control.
C. Expenses
Expenses recoverable
hereunder shall include costs of materials and supplies required, the services of individuals or firms specialising in
controlling wells, and directional drilling and similar operations necessary to bring the well(s) under
control, including costs and expenses incurred at the direction of regulatory authorities to bring
the well(s) under control, and other expenses included within Clause 1 of this Sub-Section A.
3. TERMINATION OF EXPENSES
In
any circumstances, and subject always to the Combined Single Limits of
Liability of Section Two, Insurers' liability for costs and/or expenses
incurred in regaining or attempting to regain control of a well(s) shall cease
when the well(s) is (are) brought under control as defined in Paragraph 2.B. of
this Sub-Section A.
4. EXCLUSIONS
There shall be no indemnity or liability under this Sub-Section A for:
A. any loss of or damage to any drilling or
production equipment;
B. any loss of or damage to any well or wells, or
hole or holes;
C. any loss, damage or expense caused by or arising
out of delay (including delayed and/or deferred
production) and/or loss of use and/or loss of or damage to production (including that due to loss of reservoir pressure) and/or loss of or damage to any reservoir or reservoir pressure
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