Indonesia Insurance handbook: ENERGY EXPLORATION & CONSTRUCTION POLICY

ENERGY EXPLORATION & CONSTRUCTION POLICY

THE INSURER HEREBY AGREE to insure the Insured against loss/ damage/ liabilities/ costs and expenses in accordance with the terms, conditions and limitations contained in this Policy.

PROVIDED that the liability of the Insurers shall not exceed the Sums Insured or limits of Insurers’ liability stated in this Policy or such other limits as may be substituted for these by Endorsement to the Policy signed by or on behalf of the Insurers.

POLICY SCHEDULE

i. INSURED :

Address :

GSTIN :

Contact No. :

Email Address :

Intermediary Details :

ii. LOSS PAYBEE: :

iii. THE PERIOD OF INSURANCE

Upto 84 months from at 00:01 a.m. Local Standard Time at the location of the property or operations insured.

Start Date: End Date:

iv. THE INTERESTS INSURED AND COVERAGE UNDER THIS POLICY

The coverage under this policy is applicable only for following insured sections as mentioned below and subject to the sum-insured or limits, deductibles specified against each section

Section Description Sum Insured/Limit Deductibles

v. Schedule of Items Insured:

Section Description Sum Insured/Limit

vi. Navigational Limits (If Applicable):

vii. Other specific terms, conditions, limitations:

viii. PREMIUM

SECTION DESCRIPTION PREMIUM (INR)

1.
2.
3.
4.
5.
6.
7.

Sub Total

CGST @x%
SGST@x%
IGST@x%

Total Premium

ix. Reporting and Adjustment Condition

The insured agrees to report to the Insurers the status of all wells insured under this policy at the end of the Period of Insurance, at which time the Premium for any drilling and workover wells shall be adjusted, with the premium to be calculated on the rates agreed by the Insurers at inception of the policy.

SIGNED for and on behalf of

GENERAL CONDITIONS

(Applicable to all the Sections insured hereunder). These conditions are in addition to other conditions specified in the policy.

1. GENERAL WARRANTIES

(A) It is warranted that:

i. where the Insured has an operating interest in an operation or any operations are within its direct

control, the Insured shall exercise due care and diligence in the conduct of all operations insured
utilizing all safety or hazard control practices and/or equipment generally considered to be
prudent for such operations or necessary to comply with regulations or industry requirements
(including, but not limited to, blowout preventers). In the event that any hazardous condition
develops with respect to property, operations or wells insured, the Insured shall make all
reasonable efforts to prevent the happening of an Occurrence or loss or to minimize the effects
of such Occurrence or loss; and

ii. where the Insured has a non-operating interest in any operations or any operations are outside

its direct control, it will use all reasonable endeavors to ensure that the operator or the contractor or other party having direct control complies with all the practices, regulations and requirements stated in paragraph A. above.

(B) It is further warranted that no excess coverage is in place in respect of any coverage provided

under this Insurance unless specifically agreed by the Insurers.

well in any field and it is warranted that all recommendations made by the surveyor will be complied with by the Insured.

(D) It is understood and agreed that coverage is subject to a risk survey by a surveyor appointed by

insurer within 90 days of attachment and it is warranted that all recommendations are to be complied with. The scope of surveyor shall be provided by insurers which includes Drilling Plans, Property, Operations and Maintenance.

2. NOTICE AND PROOF OF LOSS

The Insured shall give to the Insurers, as soon as practicable, notice of any Occurrence which may result in a
claim under this Insurance, stating the time, place, cause and circumstances of such Occurrence. The Named
Insured shall also file with the Insurers, as soon as practicable, a detailed, sworn Proof of Loss and Payment
Order. The Insured shall, if requested by the Insurers, make available to the Insurers or their representatives
all records, agreements, contracts or other documents needed to determine or substantiate a claim.

3. SUBROGATION

A. The Insurers shall, upon reimbursement to the Insured of any loss, damage or expense, be

subrogated to all the Insured's rights of recovery against any other person, firm or corporation who

may be legally or contractually liable for such loss, damage or expense so reimbursed by the
Insurers.

B. It is agreed that the Insurers may make claim upon and institute legal proceedings against any

parties believed responsible for loss, damage or expense reimbursed under this Insurance in the name of the Insured, and the Insured shall provide Insurers with their full co-operation in pursuing such claim or legal proceedings.

4. OTHER INSURANCE

If at the time of any loss or damage happening to any risk insured hereunder there be any other subsisting
insurance or insurances, whether effected by the insured or by any other person or persons covering the same
property, this Company shall not be liable to pay or contribute more than its rateable proportion of such loss
or damage.

5. COLLECTION FROM OTHERS

No loss shall be paid by the Insurers under to the extent that the Insured has collected the same from any
other party.

6. INSPECTION AND DISCOVERY OF RECORDS

The Insurers shall have the right of inspection and discovery of the Insured's records pertaining to all matters of whatsoever nature relating to the property/risk insured under this Insurance.

7. CANCELLATION

This insurance may be terminated at any time at the request of the Insured, in which case the Company will retain the premium at customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the Company, on 7 days notice to that effect being given to the Insured, in which case the Company shall be liable to repay on demand a rateable proportion of the premium for the unexpired term from the date of the cancellation.

8. DEDUCTIBLE

It is agreed and understood that, until unless specified specifically, each claim (including claims under the sue and labour clause) shall be reported and adjusted separately and from the amount of each claim the sum as stated in the Policy Schedule shall be deducted. For the purpose of this clause each accident or occurrence shall be treated separately, but it is agreed that a sequence of losses or damages arising from the same occurrence shall be treated as one occurrence for each section.

ADDITIONAL CONDITIONS (Applicable to Section 1)

(1) SPECIAL CONDITIONS/ BLOWOUT PREVENTER WARRANTY This Section One does not cover any loss:

Occurring while the property described herein is being operated by others than the Insured or the

Insured's employees, unless otherwise agreed to by Insurers hereon by endorsement attached hereto. Permission is granted for the property insured to be operated by the well owner or operator as required in the drilling contract.

(b) Occurring while oil, gas or air is being used as a drilling fluid but this shall not exclude the use of

oil base mud, nor the use of oil for "drilling- in" nor the use of oil for "washing-in" purposes.

the usual practice is being used. (Not applicable to cable tool rigs and spudders).

Warranted that blowout preventer(s) of standard make will be set in the surface casing, such blowout preventer(s) to be installed and tested in accordance will the usual practice.

(2) CO-INSURANCE

If the Property hereby insured shall, at the time of accident, has greater value than the sum insured thereon,
then the Insured shall be considered as being his own insurer for the difference and shall bear a rateable
proportion of the loss accordingly. The insured shall maintain sum insured equal to the reinstatement value.

(3) CONSTRUCTIVE TOTAL LOSS

There shall be no recovery for a Constructive Total Loss hereunder unless the expense of recovering and repairing the property insured shall exceed the actual insured value.

In no case shall Insurers be liable for unrepaired damage in addition to a subsequent Total Loss sustained during the period covered by this insurance.

(4) AUTOMATIC ACQUISITIONS CLAUSE

Subject to the terms, conditions and limitations of Section 1, the Insurers agree that this Insurance automatically extends to cover:

A. Additional property and/or interests of the type described under the definition of the property

insured within Section 1 which may be acquired or otherwise become at the risk of the Insured during the Period of Insurance, but coverage in respect of any such additional property and/or interests will cease 30 days after the date of acquisition or becoming at the risk of the Insured unless such additional property and/or interests are reported to and accepted by the Insurers within that 30 day period (or the expiry date of the Policy if sooner); and

B. any increases in values of property insured following construction, renovation, installation,

erection or assembly operations covered under Section One of this Policy in accordance with “Minor Works”; and

The Named Insured agrees to pay additional premium within 30 days on agreed Rates from the date acquired or becoming at the Insured’s risk to expiration if required by the Insurers. All the coverage under this section shall cease if insured doesn’t pay premium within specified time

5) REMOVAL OF WRECK/DEBRIS

The insurance under this Section 1 is extended to indemnify the Insured for all costs or expenses of, or
incidental to the actual or attempted raising, removal or destruction of the wreck and/or debris of property
insured which results from loss of or damage to such property insured as a result of a peril insured against,
including the provision and maintenance of lights, markings, audible warnings and the like, when the incurring
of such costs and/or expenses is necessary for reinstatement of the property, or is compulsory by law or
ordinance, or is by contractual obligation or when the Insured may not or cannot, for practicability of the
Insured's operations at the site in question, abandon the wreckage or debris, provided, however, that
from any such claim for costs or expenses shall be deducted the value of property salvaged or recovered
inuring to the benefit of the Insured.

The Insurers’ liability under this extension of coverage shall not exceed the sub- limit stated in the Policy
Schedule.

(6) SUE AND LABOUR EXPENSE

It is agreed that should the property insured under this Section 1 suffer loss or damage (or in the event of
imminent loss or damage) covered under the terms of this Insurance, it shall be lawful and necessary for
the Insured, their factors, servants and assigns, to sue, labour and travel for, in and about the
defence, safeguard and recovery of the said property, or any part thereof, without prejudice to this
Insurance, and subject always to the terms, conditions, limitations and exclusions of this Insurance,
the charges thereof shall be borne by the Insurers. It is especially declared and agreed that no acts of the
Insurers or the Insured in recovering, saving or preserving the property shall be considered as a waiver or
acceptance of abandonment.

The Insurers’ liability for Sue and Labour expenses shall not exceed the sub-limit stated in the Policy Schedule.

(7) MINOR WORKS

Subject to the terms, conditions and limitations of this Section 1, it is agreed and understood that this Section

1 is extended to include physical loss of or physical damage to or caused by or arising out of minor alterations and/or repairs and/or construction and/or re-construction and/or additions and/or maintenance and/or fabrication and/or modifications and/or installation and/or erection and/or similar work carried out on any of the property insured for the amount specified in the policy schedule.

COMMON CONDITION FOR SPECIFIED SECTIONS:

1. EXTENDED EXPIRATION:

If Sections 1, 2 and 3 expire or be cancelled while an Occurrence giving rise to a loss recoverable under this Insurance is in progress, it is understood and agreed that said loss, subject to all other terms and conditions and the limits of Insurers’ liability of this Insurance, will be covered under these Sections as if the entire loss had occurred prior to the date of expiration or cancellation.

2. DEFINITION OF “OCCURRENCE

The term “Occurrence”, wherever used in Sections 1, 2 and 3, shall be defined as one loss, disaster or casualty or series of losses, disasters or casualties arising out of one event.

In addition:

A. As respects windstorm, all tornadoes, cyclones, hurricanes, similar storms and systems of winds

of violent and destructive nature, arising out of the same atmospheric disturbance within any period
of 72 consecutive hours commencing during the period of this Insurance, shall be considered one
event.

B. Each earthquake shock or volcanic eruption shall constitute one event hereunder, provided that, if

more than one earthquake shock or volcanic eruption shall occur within any period of 72 consecutive hours commencing during the period of this Insurance, such earthquake shocks or volcanic eruptions shall be deemed to be one event within the meaning hereof.

C. In no event, except as provided for in the sue and labour expense clause and removal of

wreck/debris clause under Section 1, shall the Insurers' liability arising from any one accident or occurrence exceed the amount insured hereunder as set forth in the policy schedule in respect of the items subject to claim in such accident or occurrence.

GENERAL EXCLUSIONS (Applicable to All the Sections).

These exclusions are in addition to the exclusions mentioned anywhere in the policy.

It is agreed and understood that the policy shall not cover any claim on account of:

A. War and Civil War Exclusion

There shall be no indemnity or liability, loss, damage or expense resulting from:

i. war, hostile or warlike action in time of peace or war, including action in hindering, combating or

defending against an actual, impending or expected attack

a. by any government or sovereign power (de jure or de facto) or by any other authority
maintaining or using military, naval or air forces; or

b. by military, naval or air forces; or

c. by any agent of any such government, power, authority or forces; or

ii. any weapon(s) of war employing atomic fission or radioactive force whether in time of peace or

war; or

iii. insurrection, rebellion, revolution, civil war, usurped power, or action by governmental authority in

hindering, combating or defending against such an occurrence, seizure or destruction under quarantine or customs regulations, confiscation by order of government or public authority, or risks of contraband or illegal transportation or trade.

B. Radioactive Contamination Exclusion

This Clause shall be paramount and shall override anything contained in this Insurance inconsistent therewith In no case shall this Insurance cover loss, damage, liability or expense directly or indirectly caused by or contributed to by or arising from:

i. ionizing radiations from or contamination by radioactivity from any nuclear fuel or from

any nuclear waste or from the combustion of nuclear fuel;

ii. the radioactive, toxic, explosive or other hazardous or contaminating properties of any

nuclear installation, reactor or other nuclear assembly or nuclear component thereof;

iii. any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction

or radioactive force or matter; or

iv. radioactive contamination however caused whenever or wherever happening.

C. Terrorism Exclusion

There shall be no liability under these Sections One, Two and Three for any claim caused by, resulting from, or incurred as a consequence of:

i. a. the detonation of any explosive;

b. any weapon of war;

and caused by any person acting maliciously or from a political motive; or

ii. any act for political or terrorist purposes of any persons, and whether or not agents of a

sovereign power, and whether the loss, damage or expense resulting therefrom is accidental or
intentional.

D. Electronic Data Exclusion (NMA 2915)

Notwithstanding any provision to the contrary within these Sections One, Two and Three or any endorsement thereto, it is understood and agreed as follows:

These Policy shall not cover loss, damage, destruction, distortion, erasure, corruption or alteration of ELECTRONIC DATA from any cause whatsoever (including but not limited to COMPUTER VIRUS) or loss of use, reduction in functionality, cost, expense of whatsoever nature resulting therefrom, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

ELECTRONIC DATA means facts, concepts and information converted to a form useable for communications, interpretation or processing by electronic and electromechanical data processing or electronically controlled equipment and includes

programmes, software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment.
COMPUTER VIRUS means a set of corrupting, harmful or otherwise unauthorized instructions or code including a set of maliciously introduced unauthorized instructions or code, programmatic or otherwise, that propagate themselves through a computer system or network of whatsoever nature. COMPUTER VIRUS includes but is not limited to “Trojan Horses”, “worms” and “time or logic bombs”.

E. Toxic Mould Exclusion

These Policy shall not cover loss, damage, cost or expense caused directly or indirectly by, arising out of, resulting from, contributed to by, or related in any way to “mould”. Loss, damage, cost or expense caused directly or indirectly by, arising out of, resulting from, contributed to by, or related in any way to “mould” is excluded regardless of any other cause or event that contributes concurrently, or in any sequence with, the loss, damage, cost or expense.

For the purposes of this exclusion, the following definition is added to these Sections One, Two and Three:

“Mould” means any species of fungi including, but not limited to, mould, yeast, mildew, spores, mould toxins, mycotoxins, mould metabolities, mould antigens, mould allergens, smut, wet or dry rot, mould-
produced antibiotics, or dust or fumes containing any of the foregoing, individually, or in any combination therewith or with another substance.

OTHER CONDITIONS:

1. LIMITATION OF ACTION

No suit or action on this insurance for the recovery of any claims shall be sustainable in any court of law
or equity unless the Insured shall have complied fully with all the requirements of this insurance,
and unless commenced within twenty-four months next after the time a cause of action for the loss
accrues.

2. LAW, PRACTICE AND JURISDICTION AND SUIT AGAINST INSURERS This insurance Policy is subject to Indian law and jurisdiction.

3. ARBITRATION CLAUSE:

Any dispute related to claim arising out of or in relation to this insurance policy shall be referred to and resolved by arbitration under the Arbitration & Conciliation Act, 1996, enacted in India including
amendments thereto. The arbitration proceedings shall be conducted in English under and in
accordance with the provisions of the said Arbitration and Conciliation Act 1996.

The seat of arbitration shall be the place of issuance of this insurance policy or any other place in India as agreed by the parties and the parties shall bear costs of fees and expenses of arbitral tribunal in equal proportion until unless otherwise stated in arbitral or other order/award.

Section I. PROPERTY INSURANCE

A. OIL AND GAS WELL DRILLING TOOLS FLOATER FORM (ALL RISKS)

1. PROPERTY INSURED

Except as hereinafter excluded, this Section 1 insures onshore and offshore property of any type or description
(except Platforms), office contents as scheduled and agreed by Insurers, the property of the Insured or for
which the Insured may be legally liable, while at locations and in transit anywhere in the world and/or storage
and/or down-hole.

2. PERILS INSURED

This Section 1 insures against all risks of direct physical loss of or physical damage to the property insured from any external cause except as hereinafter excluded.

3. PROPERTY NOT INSURED HEREUNDER

This Section 1 does not insure:

(a) i) motor vehicles, aircraft, railroad rolling stock;

ii) cement, mud, drilling compounds or chemicals, but only whilst in use;

iii) casing and tubing installed in an oil or gas well;

iv) blueprints, plans, specifications or records;

v) property of employees;

vi) watercraft or drilling barges

(b) loss or damage to any property while airborne;

is caused by:

i) fire, lightning, windstorm, earthquake, flood, explosion above the surface of the ground, aircraft

or falling objects, strikes, riots, civil commotion, vandalism, malicious mischief;

ii) blowout and cratering, as defined herein;

iii) raising, lowering, pull-in or collapse of derrick or mast;

(d) drill stem left in the well through which an oil or gas well is completed, or drill stem for which the

well owner or operator has assumed liability;

(e) property insured used to drill a relief well to control or to attempt to control blow-out, crater or fire

in any oil or gas well, unless prior approval is obtained from the Insurers;

(f) foam solutions or other fire extinguishing materials lost, expended or destroyed in fire, lightning,

blowout or cratering, nor any other expense incidental to fighting fire or controlling or attempting
to control blowout or cratering, unless such property is stated in the schedule agreed by the Insurers and/or their Reinsurers or unless the Insurers have specifically agreed to insure such property by Endorsement to Section 1 of the Policy.

4. PERILS NOT INSURED AGAINST

This Section 1 does not insure against loss, damage or expense caused by or resulting from:

A. wear and tear, mechanical or electrical breakdown or failure, inherent vice, latent defect, gradual

deterioration, corrosion, rust, dampness of atmosphere, freezing or extremes of temperature;

B. infidelity or any dishonest act on the part of the Insured or other party or interest, it’s or their

employees or agents or any person or persons to whom the property may be entrusted (carriers for hire excepted);

C. any alterations and/or repairs and/or construction and/or re-construction and/or additions and/or

maintenance and/or fabrication and/or modifications and/or installation and/or erection and/or

similar work, except where covered under General Conditions to Section 1 Clause 10, “Minor

Works”;

D. unexplained loss, mysterious disappearance, nor loss or shortage disclosed upon taking inventory;

E. loss of use or delay, loss of hole, loss of contract or income or profits, or any loss of a consequential

nature;

F. the neglect of the Insured to use all reasonable means to save and preserve the property at time

of and after any disaster insured against and when the property is in danger by fire in neighboring
premises;

G. explosion of steam engines, steam boilers, steam slush pumps, steam pipe or connections, steam

water heaters, internal combustion engines, power slush pumps, fly wheels, pulleys, abrasive

wheels or moving or rotating parts of machines unless fire ensues, and then only for loss or damage

directly caused by ensuing fire.

5. DEFINITION OF BLOWOUT AND CRATERING

(a) The term “blowout”, as used in this Section 1, shall be defined as a sudden, accidental,

uncontrolled and continuous expulsion from the well above the earth’s surface of oil, gas, water or drilling fluids resulting in complete loss of control of the well.

(b) Term “crater”, as used in this Section 1, shall be defined as a basin-like opening in the earth's

surface surrounding a well caused by the erosive action of gas, oil or water flowing uncontrolled.

6. IN-HOLE SALVAGE EXPENSE

In the event in hole salvage expense is incurred with respect to drill stem lost or damaged as a result of a peril insured against, this insurance shall cover that proportion of such expense that the value of the drill stem below the earth's surface (at the time of loss) bears to the aggregate cost of the hole at the attained depth (at the time of loss) plus the value of the drill stem below the earth's surface (at the time of loss).

However, this insurance shall not cover:

(a) Salvage expense contractually assumed by or made the responsibility of the well owner or

operator.

(b) For any amount in excess of the value of the drill stem below the earth's surface (at the time of

loss) as respects salvage expense or loss or damage to drill stem or both combined.

Any co-insurance penalty applicable to the insured unit involved in the loss shall be applied to any claim for in hole salvage expense and loss or damage to drill stem

B. LONDON STANDARD DRILLING BARGE FORM :

1. Property Insured Hereunder

This insurance covers the hull and machinery of the drilling barge(s), as scheduled herein, including all their
equipment, tools, machinery, caissons, lifting jacks, materials, supplies, appurtenances, drilling rigs and
equipment, derricks, drill stem, casing and tubing while aboard the said drilling barge(s) and/or on barges
and/or vessels moored alongside or in the vicinity thereof and used in connection therewith (but not such
barges and/or vessels themselves), and including drill stem in the well being drilled, and all such
property as scheduled herein owned by or in the care custody or control of the Insured, except as hereinafter
excluded.

2. Navigation Limits

(a) Privilege is granted to be towed within the above Navigation Limits. Also, to cover in port, while

going on or off, and while in docks and graving docks and/or wharves, ways, gridirons and pontoons, subject to the terms and conditions of this insurance.

(b) This insurance covers up to 25% of the scheduled amount of insurance hereunder on property

insured herein (as described in clause 3 above), when separated from the property insured
hereunder whilst in temporary storage at, or in local transit to or from, ports or drilling barges within
the Navigation Limits provided in Paragraph (a). It is expressly understood and agreed, however,
that this extended coverage is concluded within and shall not increase the total amount of
insurance hereunder.

3. Coverage

Subject to its terms, conditions and exclusions this Insurance is against all risks of direct physical loss of or damage to the property insured, provided such loss or damage has not resulted from want of due diligence by the Insured, the Owners or Managers of the property insured, or any of them.

4. Collision Liability

And it is further agreed that:

a) if the Vessel shall come into collision with any other ship or vessel, and the Insured or the Surety

in consequence of the Vessel being at fault shall become liable to pay and shall pay by way of damages to any other person or persons any sum or sums in respect of such collision, the Underwriters will pay the Insured or the Surety, whichever shall have paid, such proportion of such sum or sums so paid as their respective subscriptions hereto bear to the Agreed Value, provided always that their liability in respect to any one such collision shall not exceed their proportionate part of the Agreed Value;

b) in cases where, with the consent in writing of a majority (in amount) of Hull Insurer, the liability of

the Vessel has been contested, or proceedings have been taken to limit liability, the Insurer will
also pay a like proportion of the costs which the Insured shall thereby incur or be compelled to
pay When both vessels are to blame, then, unless the liability of the owners or charterers of one or both such

vessels becomes limited by law, claims under the Collision Liability clause shall be settled on the principle
of Cross-Liabilities as if the owners or charterers of each vessel had been compelled to pay to the owners or
charterers of the other of such vessels such one-half or other proportion of the latter's damages as may
have been properly allowed in ascertaining the balance or sum payable by or to the Insured in
consequence of such collision.

Provided that this clause shall in no case extend to any sum which the Insured may become liable to pay or shall pay in consequence of, or with respect to:

a) removal or disposal of obstructions, wrecks or their cargoes under statutory powers or otherwise

pursuant to law;

b) injury to real or personal property of every description;

c) the discharge, spillage, emission or leakage of oil, petroleum products, chemicals or other

substances of any kind or description whatsoever;

d) cargo or other property on or the engagements of the Vessel;

e) loss of life, personal injury or illness.

Provided further that exclusions b) and c) above shall not apply to injury to any other vessel with which the
Vessel is in collision or to property on such other vessel except to the extent that such injury arises out of any
action taken to avoid, minimise or remove any discharge, spillage, emission or leakage described in c).

5. Exclusions

Notwithstanding anything to the contrary which may be contained in this insurance there shall be no liability under this insurance in respect of:

a) Loss, damage or expense caused by or attributable to earthquake or volcanic eruption, or fire and/or

explosion and/or tidal wave consequent upon earthquake or volcanic eruption.

b) Loss, damage or expense which arises solely from the intentional sinking of the barge for operational

purposes; such sinking shall not constitute a collision, stranding, sinking or grounding within the meaning of this insurance.

c) Loss, damage or expense caused whilst or resulting from drilling a relief well for the purpose of

controlling or attempting to control fire blowout or cratering associated with another drilling barge,
platform or unit unless immediate notice be given to Insurer of said use and additional premium paid
if required.

d) Any claim, be it a Sue and Labour Expense or otherwise, for moneys, materials or property expended

or sacrificed in controlling or attempting to control blowout or cratering or in fighting fire associated with blowout.

e) Loss, damage or expense caused by or resulting from delay detention of loss of use.

f) Wear and tear, gradual deterioration, metal fatigue, machinery breakdown, expansion or contraction due to change in temperature, corrosion, rusting, electrolytic action, error in design: nor does this

insurance cover the cost of repairing or replacing any part which may be lost, damaged, or condemned by reason of any latent defect therein.

g) Loss of or damage to dynamos, exciters, lamps, motors, switches and other electrical appliances

and devices, caused by electrical injury or disturbance, unless the loss or damage be caused by a
peril not excluded hereunder originating outside the electrical equipment specified in this clause.
Nevertheless, this clause shall not exclude claims for physical loss or damage resulting from fire.

h) Liabilities to third parties except as specifically covered under the terms of the Collision Liability

Clause contained herein.

i) Claims in connection with the removal of property, material, debris or obstruction, whether such

removal be required by law, ordinance, statute, regulation or otherwise.

j) Loss of or damage to drill stem located underground or underwater unless directly resulting from

fire, blowout, cratering, or total loss of the Drilling Barge caused by a peril insured hereunder. There
shall be no liability in respect of drill stem left in the well and through which an oil or gas well is
completed.

Blowout. The term "Blowout" shall mean a sudden, accidental, uncontrolled and continuous expulsion from a well and above the surface of the ground of the drilling fluid in an oil or gas well, followed by continuous and uncontrolled flow from a well and above the surface of the ground of oil, gas or water due to encountering subterranean pressures.

Cratering. The term "Crater" shall be defined as a basin-like depression in the earth's surface
surrounding a well caused by the erosion and eruptive action of oil, gas or water flowing without
restriction.

k) Well(s) and/or hole(s) whilst being drilled or otherwise.

l) Drilling mud cement chemicals and fuel actually in use, and casing and tubing in the well.

m) Unrefined oil or gas or other crude product.

n) Blueprints, plans, specifications or records, personal effects of employees or others.

o) Scraping or painting the bottom of the hull of the drilling barge.

6. Blowout Preventer Warranty

The well and/or hole will be equipped with a minimum of three pressure operated blowout preventers, which shall be installed and tested immediately after installation.

7. Limit of Liability

In no event, except as provided for in the Sue and Labour Expense Clause and Collision Liability Clause
herein, shall the Insurer' liability arising from any one accident or occurrence exceed the amount insured
hereunder as set forth in the policy in respect of the items subject to claim in such accident or occurrence.

In respect of the property insured hereunder Insurer shall not be liable for more than their proportion of the cost of repairing or replacing the property damaged or lost with materials of like kind and quality to a condition equal to but not superior to or more extensive than its condition prior to the loss; nevertheless in respect of the hull of the Drilling Barge covered hereunder all costs of repair and replacement for which Insurer may be liable shall be on the basis of new for old with no deduction for depreciation.

In no event shall Insurer be liable for any increased cost of repair or reconstruction by reason of law, ordinances, regulation, permit or licence regulating construction or repair.

8. Constructive Total Loss

There shall be no recovery for a Constructive Total Loss hereunder unless the expense of recovering and repairing the insured property shall exceed the actual insured value.

In no case shall Insurer be liable for unrepaired damage in addition to a subsequent Total Loss sustained during the period covered by this insurance.

9. Sue and Labour Expense

It is further agreed that should the property insured hereunder suffer loss or damage covered under the terms of this insurance, it shall be lawful and necessary for the Insured, their Factors, Servants and Assigns, to sue, labour and travel for, in and about the Defence, Safeguard and Recovery of the said property, or any part thereof, without prejudice to this insurance, and subject always to the terms conditions limitations and exclusions of this insurance, the charges thereof shall be borne by the Insurer. And it is especially declared and agreed that no acts of the Insurer or Insured in recovering, saving or preserving the property insured shall be considered as a waiver or acceptance of abandonment.

The Insurer' liability for Sue and Labour Expenses shall not exceed ………% of the insured value of the item(s) in the Defence, Safeguard or Recovery of which such expense is incurred.

10. Lay Up and Cancellation

To return daily pro rata of rates to be agreed by Insurer for any period of 30 or more consecutive days the vessel may be laid up in port unemployed.

Provided always that: -

a) the location shall be approved by surveyor appointed by Lloyd's Agent or approved by Insurer.

b) there shall always be a watchman on board.

c) no return shall be allowed in the event of the vessel becoming an actual or constructive or

compromised or arranged total loss during the currency of this insurance.

d) there shall be no shifts during the lay-up period.

e) there shall be no movement of legs or variation in buoyancy during the lay-up period.

f) In the event of any amendment of the annual rate, the rates of return shall be adjusted accordingly.

The return for a laid-up period of 30 or more consecutive days which fall on two policies effected for the same Insured shall be apportioned over both policies on a daily pro rata basis 11. Free of Capture and Seizure

Notwithstanding anything to the contrary contained in this insurance, there shall be no liability for any claim caused by, resulting from, or incurred as a consequence of: -

a) Capture, seizure, arrest, restraint or detainment, or any attempt threat; or

b) Any taking by requisition or otherwise, whether in time of peace or war and whether lawful or

otherwise; or

c) Any mine, bomb, torpedo or other engine of war; or

d) Any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or

radioactive force or matter; or

e) Civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or piracy; or

f) i) the detonation of an explosive

ii) any weapon of war

and caused by any person acting maliciously or from a political motive; or

g) Any act for political or terrorist purposes of any person or persons, whether or not agents of a

Sovereign Power, and whether the loss, damage or expense resulting therefrom is accidental or intentional; or

h) Hostilities or warlike operations (whether there be a declaration of war or not) but this subparagraph h) not to exclude collision or contact with aircraft, rockets or similar missiles, or with any fixed or floating object, or stranding, heavy weather, fire or explosion unless caused directly by a hostile act by or against a belligerent power which act is independent of the nature of the voyage or operation which the vessel concerned, or in the case of a collision or contact, any other vessel involved therein, is performing. As used herein, 'power' includes any authority maintaining naval, military or air forces in association with a power.

C. LONDON STANDARD PLATFORM FORM ALL RISKS (Except as hereinafter excluded)

1. PROPERTY INSURED HEREUNDER

This insurance covers platform installation(s) as scheduled and agreed by Insurers, which includes the platform(s), catwalks and landing ramps, (but excluding dolphins) and all property as scheduled and agreed by Insurers, owned by or in the care, custody or control of the Insured located on the said platform installation(s) except as hereinafter excluded.

Each deemed to be separately insured.

Any loss paid hereunder shall not reduce the amount of the insurance except in the event of a Total Loss and/or Constructive and/or Agreed and/or Arranged Total Loss.

2. COVERAGE

Subject to its terms, conditions and exclusions this insurance is against all risks of direct physical loss of or physical damage to the insured property, provided such loss or damage has not resulted from want of due diligence by the Insured, the owners or managers of the insured property, or any of them.

3. EXCLUSIONS

Notwithstanding anything to the contrary which may be contained in this insurance there shall be no liability under this insurance in respect of: -

(a) Loss, damage or expense caused whilst or resulting from drilling a relief well for the purpose of

controlling or attempting to control fire blowout or cratering associated with another platform or
unit unless immediate notice be given to Insurers of said use and additional premium paid if
required.

(b) Any claim, be it a sue and labour expense or otherwise, for monies, materials or property expended

or sacrificed in controlling or attempting to control blowout or catering or in fighting fire associated

with blowout.

(d) Wear and tear, gradual deterioration, metal fatigue, machinery breakdown, expansion or

contraction due to change in temperature, corrosion, rusting, electrolytic action, error in design; nor does this insurance cover the cost of repairing or replacing any part which may be lost, damaged, or condemned by reason of any latent defect therein.

(e) Loss of or damage to dynamos, exciters, lamps, motors, switches and other electrical appliances

and devices, caused by electrical injury or disturbance, unless the loss or damage be caused by
a peril not excluded hereunder originating outside the electrical equipment specified in this clause.

Nevertheless, this clause shall not exclude claims for physical loss or physical damage resulting from fire.

(f) Liabilities to third parties.

(g) Drilling and/or servicing rig(s) including drill pipe and drill collars and all other components forming

part of a drilling or servicing rig(s).

(h) Well(s) and/or hole(s) whilst being drilled or otherwise.

(i) Drilling mud, cement, chemicals and fuel actually in use, and casing and tubing in the well.

(j) Unrefined oil or gas or other crude product.

(k) Blueprints, plans, specifications or records, personal effects of employees or others.