SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT INSURANCE

SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT INSURANCE

Asuransi oil and gas wording

 SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT INSURANCE

1.         INSURING AGREEMENTS

The Insurers agree, subject to the Combined Single Limits of Liability, terms and conditions applicable to Section Two, to indemnify the Insured against:

 

A.         all sums which the Insured shall by law or under the terms of any oil and/or gas and/or thermal

energy lease and/or license be liable to pay for the cost of remedial measures and/or as damages for bodily injury (fatal or non-fatal) and/or loss of, damage to or loss of use of property caused directly by seepage, pollution or contamination arising from wells insured herein;

B.         the cost of, or of any attempt at, removing, nullifying or cleaning up seeping, polluting or

contaminating substances emanating from wells insured herein, including the cost of containing and/or diverting the substances and/or preventing the substances reaching the shore;

 

C.        costs  and  expenses  incurred  in  the  defence  of  any  claim  or  claims  resulting from actual or

alleged seepage, pollution or contamination arising from wells insured herein, including Defence
Costs and costs and expenses of litigation awarded  to  any  claimant  against  the  Insured,
provided,  however,  that  the inclusion  of  the  above  costs  (and  expenses)  shall  in  no  way
extend  the combined single limits of liability of the Insurers over all Sub-Sections of this Section
Two,

provided always that such seepage, pollution or contamination results from both

(1)        an accident or occurrence taking place during the period of this Insurance (including any

continuation thereof provided for by Clause 13. of the Additional General Conditions) and of which
notice has been given in accordance with Clause 3. of the General Conditions of this Section Two,
and

 

(2)        an occurrence giving rise to a claim which would be recoverable under Sub- Section A of Section

Two if the Insured's Retention applicable to Sub-Section A were nil.

 

2.         INSURED

As respects this Sub-Section C only, but subject always to the Combined Single Limit of Liability over all Sub-
Sections of this Section Two, the unqualified word "Insured" includes the Named Insured, and any principal,
officer, director or stockholder or employee thereof while acting within the scope of his duties as such.

3.         COST AND APPEALS CLAUSE

 

In the event of any claim and/or series of claims arising out of one Occurrence where the Insured's final gross
claim is likely to exceed the retention of the Insured, no costs shall be incurred on behalf of the Insurers without
the consent of the Insurers, and if such consent is given, the Insurers shall consider such costs as part of the
final claim hereunder. No settlement of losses by agreement shall be effected by the Insured without the
consent of the Insurers where the Insured's final gross claim will exceed the retention of the Insured

In the event that the Insured elects not to appeal against a judgement in excess of the retention of the Insured, the Insurers may elect to conduct such appeal at their own cost and expense, and shall be liable for the taxable cost and interest incidental thereto, but in no event shall the liability of Insurers exceed the Combined Single Limits of Liability over all Sub-Sections of this Section Two.

 

4.         EXCLUSIONS

There shall be no indemnity or liability under this Sub-Section C for:

A.         any loss of or damage to any drilling or production equipment at the site of any well insured herein;

B.         any claim recoverable under Section Two solely by reason of the addition or attachment to Sub-

Section A of the Underground Control of Well Endorsement;

 

C.        any claim arising directly or indirectly from seepage, pollution or contamination if such seepage,

pollution or contamination:

 

(1)        is deliberate from the standpoint of the Insured or any other person or organisation acting for

or on behalf of the Insured; or

(2)        results directly from any condition which is in violation of or non-compliance with any

governmental rule, regulation or law applicable thereto; notwithstanding the foregoing, this Exclusion does not apply with respect to any such condition which at the time of loss is in the process of being corrected by a schedule or program sanctioned and approved by the appropriate governmental authority with jurisdiction over such rule, regulation or law, to the extent that the Insured is in compliance with such schedule or program;

 

D.         any claim for mental injury, anguish or shock unless same results from physical injury to the

claimant.

 

SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT

 

Subject  to  the  terms,  conditions,  exclusions  and  Combined  Single  Limits  of  Liability  of Section Two, it is agreed to extend coverage under this Sub-Section C to indemnify or pay on behalf  of  the  Insured  all sums,  costs  and  expenses  as  defined  in  the  Insuring  Agreement applicable  to  this  Sub-Section  C arising  from  seepage,  pollution  or  contamination  arising from property covered under Section 1 or which could be covered under Section 1 had the Insured had an interest.

However, no indemnity shall be payable to the Insured in respect of such properties unless all the following conditions have been met:

 

a.         the seepage, pollution or contamination was caused by an event and was neither expected or

intended by the Insured and

b.         the event first commenced on an identified specific date during the Period specified in the Policy

Schedule hereto.

c.         the event was first discovered by the Insured or the Operator within …. days of such first

commencement and

d.         written notification of the event was first received from the Insured by Insurers within … days of

the Insured's or Operator's first discovery of the event and

e.         the event did not result from the Insured's intentional violation of any statute, rule, ordinance or

regulation.

REDRILLING/EXTRA EXPENSE INSURANCE

REDRILLING/EXTRA EXPENSE INSURANCE

Asuransi oil and gas wording

 

REDRILLING/EXTRA EXPENSE 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 reasonably incurred to restore or
redrill a well insured hereunder, or any part thereof, which has been lost or otherwise damaged as a result of
an Occurrence giving rise to a claim which would be recoverable under Sub-Section A of Section Two if the
Insured's  Retention  applicable  to  Sub-Section  A  were  nil,  subject  to  the  following conditions:

 

A.         The Insurers shall reimburse the Insured only for such costs and expenses as would have been

incurred to restore or redrill a well had the most prudent and economical methods been employed.

 

B.         There shall be no coverage under this Sub-Section B for restoration or redrilling of any well whose

flow can be safely diverted into production, including by completing through drill stem left in the well insured hereunder, or which can be completed through a relief well(s) drilled for the purpose of controlling a well.

C.        In no event shall the Insurers be liable for costs and/or expenses incurred

 

(1)        with respect to drilling wells, to drill below the depth reached when the well became out of

control as defined in Clause 2. of Sub-Section A of Section Two and

 

(2)        with respect to producing or shut-in wells, to drill below the geologic zone or zones from which

said well(s) was (were) producing or capable of producing.

 

D.         In respect of drilling wells, the Insurers' liability hereunder shall in no event exceed 130% of the

cost incurred to drill the original well to the depth reached at the time when the well became out of control or fire occurred.

 

E.         In  respect  of  producing,  shut-in  or  workover  wells,  The  Insurers'  liability hereunder  shall  in

no  event  exceed  …..%  of  the  cost  incurred  to  drill  the original  well,  plus  10%  per  annum compound  thereof  from  the  date  of spudding  of  the  original drilling  of  the  well until  the date  of  the  occurrence giving rise to the aforesaid claim which would  have been recoverable under Sub-Section  A  of  this  Section  Two  if  the  Insured's  Retention  applicable  to Sub-
Section A were nil, subject to a maximum of ……% of the original cost.

 

F.         In any circumstances, the Insurers' liability under this Sub-Section B for costs and expenses shall

cease

(1)        if actual restoration or redrilling has not commenced within ….. days after

 

a.         the date of the accident or occurrence giving rise to coverage under this Sub-Section B,

or b.         the date of cancellation or expiry of this Section Two of the Policy, whichever shall later

occur; and

 

(2)        in any event when the depths set forth in Paragraph 1.C. of this Sub- Section B have been

reached and the well restored to a condition comparable to that existing prior to the occurrence
giving rise to the claim, or so far as possible utilising generally available equipment and
technology.

2.         EXCLUSIONS

There shall be no indemnity or liability under this Sub-Section B for:

A.       any loss of or damage to any drilling or production equipment;

B.       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;

C.       costs and/or expenses incurred to restore or redrill any relief well, or any part thereof;

D.       any claim recoverable under this Section Two solely by reason of the addition or attachment to

Sub-Section A of this Policy of the Making Wells Safe Endorsement;

E.       redrilling and/or recompletion or for in-hole equipment in respect of any well that was plugged

and abandoned prior to loss or damage covered under Sub- Section A hereof and that remained plugged and abandoned at the time of such loss or damage.

CONTROL OF WELL INSURANCE

CONTROL OF WELL INSURANCE

Asuransi oil and gas wording

 

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

OPERATORS EXTRA EXPENSE INSURANCE

OPERATORS EXTRA EXPENSE INSURANCE

Asuransi oil and gas wording

 ADDITIONAL GENERAL CONDITIONS APPLICABLE TO ALL SUB-SECTIONS OF SECTION TWO

 

1.         COVERAGE

Subject always to its terms and conditions and to the Policy Schedule and Policy General Conditions, the Insurers agree to provide coverage under this Section for:

A.        Control of Well Insurance (as per Sub-Section A).

B.        Redrilling/Extra Expense Insurance (as per Sub-Section B).

C.         Seepage and Pollution, Clean-up and Containment Insurance (as per Sub- Section C).

2.         LIMITS OF INSURERS’ LIABILITY UNDER THIS SECTION

This Section Two provides to the Insured (be they one or more) insurance coverage only up to but not
exceeding the Combined Single Limits of Liability stated in Item 5. of the Policy Schedule, including Defence
Costs, which are the total Combined Single Limits of Insurers' liability to the Insured for any one Occurrence
and over all of Sub- Sections A, B and/or C, subject always to the applicable underlying retentions.

3.         INSURED'S RETENTION UNDER THIS SECTION TWO

The Combined Single Limits of Insurers’ liability referred to in Clause 2. are excess of the Insured's Retentions stated in Item 6 of the Policy Schedule.

 

4.         REPORTING CLAUSE

The Insured shall report to the Insurers within …... days after the expiry of this Section Two the status of all
wells insured hereunder during the preceding period and agrees to pay any additional premium if required at
the rates agreed with the Insurers. Premiums accruing from this report are due and payable as the report is
made.

5.         WELLS INSURED AND RATES

 

Covering wells onshore and offshore India as stated in the schedule seen and agreed by the Insurers and/or their Reinsurers and retained on file by the Insured and their insurance brokers.

 

Applicable Rating Areas and Rates are as agreed with and retained on file by the Insurers and/or their
Reinsurers and/or at the offices of their insurance brokers. All wells not scheduled at inception are held
covered by the Insurers at rates, terms and conditions to be agreed by their Reinsurers prior to spudding in or
attachment.

 

6.         CO-VENTURERS

It is understood and agreed that, subject to the provisions of Clause 10. of these Additional General Conditions,
this insurance may be extended to insure the interests of co- venturers (defined as co-owners,  partners  and/or
other  party (ies) having a financial and insurable interest in the wells insured hereunder), all of whom individually and collectively are non-operators (all hereinafter referred to as "Co- Venturers"), and provided the agreement to include such Co-Venturers is executed in writing between and/or among the parties prior to any occurrence giving rise to claim for reimbursement hereunder.

Such Co-Venturers who comply with the above paragraph shall be deemed to be named as additional Insureds
hereunder only in respect of wells insured hereunder and only for the period(s) of time operations in respect
of said wells are insured hereunder as determined by Clause 13. of these Additional General Conditions.

 

Any cover granted hereunder to Co-Venturers shall be limited to operations in which a Co-Venturer has a common interest with the named Insured and shall be subject in all respects to the terms, conditions and rates and Combined Single Limits of Liability specified in this Section Two.

 

If the Named Insured is not the operator of a well, then this insurance shall not cover the operator without the Insurers' prior approval.

 

7.         RATING PROVISIONS

A.       Rates - as agreed with the Insurers:

(1)   Drilling Rates, if any, apply for the period

 

a.   during which any well is being drilled and/or deepened and/or completed, and

 

b.   during any remaining period of this Section Two of the Policy, if any, during which

 

(i)         such well, if any, is in its subsequent Producing and/or Shut-In and/or Plugged and

Abandoned condition and

 

(ii)        the Insured is purchasing coverage hereunder for its other Producing and/or Shut-In

and/or Plugged and Abandoned Wells, if any;

 

(2)   Workover Rates, if any, cover for the period during which any well is being serviced and/or worked

over and/or reconditioned; and

 

(3)   Producing and/or Shut-In and/or Plugged and Abandoned Rates, if any, are annual but shall not

apply to Producing and/or Shut-In and/or Plugged and Abandoned Wells, if any, for which premium at Drilling Rates under Paragraph 7. A. (1) of these Additional General Conditions has been paid under this Section Two.

 

B.        It is understood and agreed that the rate per foot shall be applied to the total footage drilled,

measured through the hole from the surface of the ground or water bottom to the bottom of the
well.

 

C.       Premium applicable to deepening of wells and multiple completions shall be charged at 100% of  the applicable drilling rate per foot and such rate shall apply to the final completed depth of the well

measured through the hole from the surface of the ground or water bottom to the bottom of the well.

8.         RATING AREAS

Onshore India wells rated as Area 2, wet wells offshore India rated as Area 3 if water depth less than 10,000 feet. Wet wells offshore India rated as Area 4 if water depth is greater than 10,001 feet.

9.         EXCLUSIONS

 

There shall be no indemnity or liability under this Section Two for:

 

A.        any fines or penalties imposed under the laws of any State or Nation or other Government entity,

or any agency or subdivision thereof;

 

B.        any punitive or exemplary damages including any other damages resulting from multiplication of

compensatory damages;

 

C.       any claims whatsoever arising directly or indirectly from any occurrence caused, in whole or in part,

by any breach of any of the General Warranties in Clause 1. of the General Conditions or Clause

15 of these Additional General Conditions applicable to all Sub-Sections of Section Two;

 

D.       loss, damage or expense caused by the infidelity of the Insured or any other person or organisation

acting for or on behalf of the Insured;

 

E.       loss, damage or expense as respects any well in the course of being drilled, deepened, serviced,

worked over, completed and/or reconditioned at the inception of this Insurance, until final termination of said drilling, deepening, servicing, working over, completing and/or reconditioning, unless specifically agreed to by the Insurers.

10.       PARTIAL INTEREST CLAUSE

The Combined Single Limits of Liability over all Sub-Sections of this Section Two, the Insured's Retentions,
any separate limit of liability set forth in any Endorsement to this Section Two, and the rates expressed herein
are for a 100% interest. In the event that the interest of the Insured in any one well insured hereunder does
not amount to 100%, then said Combined Single Limits of Liability, the Insured's Retentions, any separate limit
of liability set forth in any Endorsement and the rates applicable to that well, shall be reduced proportionately
and shall apply in the same proportion as the total interest of the Insured in said well insured hereunder bears
to 100%. In the event of an Occurrence giving rise to a claim(s) recoverable hereunder, the Insurers shall in
no event be liable under any Sub-Section of this Section Two or Endorsement to it for a greater percentage
interest in any such claim than the Insured's percentage interest in the well with respect to which, and at the
time that, such Occurrence took place.

11.       RESIDUAL VALUE

In the event of an Occurrence giving rise to a claim recoverable within the terms and conditions of this Section Two, the residual value of any equipment and/or materials used or purchased by the Insured in respect of such Occurrence will inure to the benefit of the Insurers in the adjustment of such claim 12.       ADDITIONAL DEFINITIONS

A.         The term “Well(s) Insured” shall be defined as oil and/or gas and/or thermal energy wells:

 

(1)      while being drilled, deepened, serviced, worked over, completed and/or reconditioned until

completion or abandonment as set forth in Clause 13. of these Additional General Conditions;

(2)      while producing;

(3)      while shut-in;

(4)      while plugged and abandoned,

for the account of the Insured and as may be included within the areas and types of wells

insured as set forth in Clause 5. of these Additional General Conditions.

B.         The term “Defence Costs” shall be defined as investigation, adjustment, settlement, litigation and

legal expenses, premiums on attachment or appeal bonds, and pre and post judgement interest and shall exclude all expenses for salaried employees, general retainer fees normally paid by the Insured and office expenses of the Insured.

 

13.       ATTACHMENT AND TERMINATION OF COVERAGE

A.         Attachment of Coverage:

 

(1)      In respect of any well(s) insured hereunder, coverage shall attach when the Insured acquires

an interest in such well(s) unless coverage attaches later by operation of any of Paragraphs 13.

A. (2), (3) or (4) below;

(2)      In respect of any well(s) insured hereunder spudded in during the period of this Section Two of

the Policy, coverage shall attach at the time of "spudding in";

(3)      In respect of any well(s) in the course of being drilled, deepened, serviced, worked over,

completed and/or reconditioned at the inception of this Insurance, and which would have been insured hereunder at inception in the absence of the Earthquake Exclusion of these Additional General Conditions, coverage shall attach upon final termination of said drilling, deepening, servicing, working over, completing and/or reconditioning;

(4)      In respect of any other well(s) insured hereunder, coverage shall attach at inception of this

Section Two of the Policy.

B.        Termination of Coverage:

 

(1)      In respect of any well(s) insured hereunder, coverage shall terminate when the Insured ceases

to have an interest in such well(s) unless coverage is terminated by operation of any of Paragraphs 13.B.(2), (3) or (4) below;

 

(2)      In respect of any well(s) which are insured hereunder during drilling only, by virtue of the Insured's electing not to purchase coverage for Producing and/or Shut-In and/or Plugged and

Abandoned Wells, coverage shall terminate upon either total and/or complete abandonment  or completion of such well(s), which shall include the setting of the "Christmas Tree", pumping
equipment or wellhead equipment or the dismantling or removal of the drilling equipment from
the drill site, or the termination of the Insured's responsibility under contract, whichever shall
first occur, except that, if removal of the drilling equipment from the drill site occurs first, then
the period of time between complete removal of such equipment and the commencement of completion operations shall not exceed ….. days in order for said completion operations to be covered hereunder;

 

(3)      In respect of any well(s) insured hereunder in the course of being drilled, deepened, serviced,

worked over, completed and/or reconditioned at the expiry or cancellation of this Section Two of the Policy, coverage shall terminate upon final termination of said drilling, deepening, servicing, working over, completing and/or reconditioning, notwithstanding the fact that said final termination may occur later than said expiry or cancellation;

 

(4)      In respect of any other well(s) insured hereunder, coverage shall terminate at the expiry or

cancellation of this Section Two of the Policy or (if plugged and abandoned wells are not insured
hereunder) upon total and/or complete abandonment of such well(s), whichever shall first occur.

14.       DEFENCE

The Insurers shall not be called upon to assume the handling or control of the defence or settlement of any
claim made against the Insured but the Insurers shall have the right, but not the duty, to participate with the
Insured in the defence and control of any claim which may be recoverable in whole or in part under this Section
Two.

The Insurers shall not be called upon to pay any Defence Costs in relation to any claim until after the final resolution of such claim.

The Insurers shall not be liable to pay any Defence Costs unless the prior consent of the Insurers was obtained before those Defence Costs were incurred.

15.       WARRANTIES

A.        It is warranted that where the Insured is the operator or joint operator on any insured well being

drilled,  deepened,  serviced,  worked  over,  completed  and/or  reconditioned,  a  blowout preventer(s) of standard make will, when in accordance with all regulations, requirements and normal and customary practices in the industry, be set on surface casing or on the wellhead and installed and tested in accordance with usual practice.

When the Insured is a non-operator on any insured well, it will endeavour to see that the operator complies with all the warranties set out in this Clause 15.

B.         It is further warranted that the Insured will use every endeavour to ensure that they and/or their

contractors comply with all regulations and requirements in respect of fitting storm chokes and
other equipment to minimise damage or pollution, and that all equipment (including drilling and/or
workover rigs) will be manned by properly certified personnel where required by regulatory
authorities.

C.        It is further warranted that in the event of a well becoming out of control or other escape or flow

of drilling fluid, oil, gas or water, the Insured will use every endeavour to control the well or stop the escape or flow.

D.         It is understood and agreed that all wells insured hereunder as defined in Paragraph 12.A. of

these Additional General Conditions for which the Named Insured is the operator, or where the Named Insured has a non-operating interest but is responsible for its own insurance, shall be insured hereunder for not less than the Named Insured's percentage interest therein