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Piper alpha 25 years on4 July 2013

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agenda

16.00 WelcomeTom Bolt, Lloyd’s

16.10 IntroductionMichael Payton, Clyde & Co

16.20 Well Kill OperationsBrian Krause, J H Blades

16.45 Legal, health and safetyDavid Reynolds, Clyde & Co

17.05 ClaimsPeter Murray, ACE European Group, Claims Director

17.30 Insurance/Reinsurance PanelRichard Youell, Former UnderwriterMagne Seljeflot, Chairman, Aon Energy Andrew Hedges, Canopius, Head of Marine Treaty

17.55 CloseMichael Payton, Clyde & Co

18.00 Networking drinks reception sponsored by Clyde & Co

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Trailer: Fire in the Night

► http://www.youtube.com/watch?v=nqBl6Bn_ifg

PIPER ALPHAPresentation by

Brian Krause

J. H. BLADES & CO., INC.

© Lloyd’s 2012

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Legal, health and safetyDavid Reynolds, clyde & co

Piper Alpha

Piper Alpha – what happened? 6 July 1988

• Routine process upset during night shift – perfectly manageable

• Muddle over cross-referencing of permits to work left pending from dayshift maintenance process

• Process operators unaware that a PSV was missing from stand-by condensate pump

• Prepared stand-by pump – resultant gas leak

• Initial explosion and containable fire

• Game-changer: Tartan 36” gas riser explosion

Initial explosion and containable fire

Game-changer: Tartan 36” gas riser explosion

Effects

1. Platform destroyed

Effects

1. Wells to be controlled/made safe

2. 165 platform personnel and two rescuers dead, 62 injured/survived

3. Approx 70% work force were employed by contractors (26 companies)

4. All 26 contracts had knock for knock indemnities but qualified in respect of:• sole negligence• wilful misconduct

6. Contractors refused to contribute to settlement

Effects …

1. Cullen enquiry – rewrote the regulatory regime• Safety case• Goal setting

2. Knock for knock litigation against the contractors• 3½ years Court of Session• 6 months in first appeal• 2 days in House of Lords

Result: Knock for knock rules ok!

What’s new?

1. US lawyers now more aggressive?

2. But:• Texas is now also adopting forum run conveniens principles• UKCS has seen many new entrants, with resultant reduced

“USA” connection

3. So US jurisdiction may be more difficult for claimants to establish

4. Canadian connection – Canadian courts generally more cautious about accepting jurisdiction

5. Offshore workforce:• still predominantly British• but 125 other nationalities involved• now getting younger?• less fit?

Post-Macondo Regulatory Change

PIPER ALPHA

167 Killed

No oil pollution

$1.2 billion

No political involvement

MACONDO

11 Killed

4.9 million barrels

$40+ billion

Obama “furious” with “British Petroleum”

US regulations still prescriptive

• 21 May 2013 first reading EU Directive

• UK – likely to implement environmental off-shore regulations to comply by mid 2015

• Consultation 2014

© Lloyd’s 2012