Скачать презентацию Risk Management Insurance Bauer College UH Feb 2010 Скачать презентацию Risk Management Insurance Bauer College UH Feb 2010

3c95ea56ac5e2ee984dce5c6a0841cae.ppt

  • Количество слайдов: 35

Risk Management & Insurance Bauer College/UH Feb 2010 Risk Management & Insurance Bauer College/UH Feb 2010

Agenda § Risk Management – functions and process § Anadarko’s Risk Management Presentation § Agenda § Risk Management – functions and process § Anadarko’s Risk Management Presentation § Risk Bearing Capacity Study § Synthetic Lease – Windstorm Insurance § Other Risk Management Issues 2

Anadarko Petroleum Corp (APC) § One of the largest independent oil and gas exploration Anadarko Petroleum Corp (APC) § One of the largest independent oil and gas exploration and production companies § $32 B in market cap § 2. 3 billion barrel of oil equivalent of proved reserves § $9 B of revenues, $4 B in CFFO § Major areas of operation include onshore US, deepwater Gulf of Mexico, Algeria, offshore West Africa & Brazil 3

Risk Management Functions § Project RM § Marketing RM § Enterprise RM § Property/Casualty Risk Management Functions § Project RM § Marketing RM § Enterprise RM § Property/Casualty RM § What do they all have in common? • RM is a Process – no right or wrong answers! 4

Risk Management - Mission Statement § To assist in the identification, assessment and management Risk Management - Mission Statement § To assist in the identification, assessment and management of events and contingencies in order to preserve and enhance the assets of the Company. Primary areas of focus include management of corporate property and casualty insurance policies and related claims, and the drafting and negotiating of Company contracts for maximum risk transfer. 5

Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY INSURANCE ASSUME 6

Anadarko’s Contractual Risk Management Philosophy § To Create a consistent and effective approach to Anadarko’s Contractual Risk Management Philosophy § To Create a consistent and effective approach to the allocation of risk in the corporate contracts structure. § To Ascertain that those significant risks assumed by Anadarko are insured or knowingly self-insured. § To Respond to differences/changes in governing laws (enforceability issues). 7

E&P Contracts JOA NON OPERATORS MSC ANADARKO AS OPERATOR DRILLING GENERAL SERVICES G&G - E&P Contracts JOA NON OPERATORS MSC ANADARKO AS OPERATOR DRILLING GENERAL SERVICES G&G - CONSULTANTS - SEISMIC - PROCESSING PHA PRODUCERS (SUB-SEA) CHARTER - OFFSHORE - ONSHORE - VESSELS - AIRCRAFT OTHER - SURFACE USE AGMNTS. - PROFESSIONAL SVRS. - CONSULTANTS - LEASE AGREEMENTS CONSTRUCTION - ENGINEERING - FABRICATION - CONSTRUCTION - INSTALLATION 8

Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY INSURANCE ASSUME 9

Insurance Coverages § Directors & Officers Insurance § Fiduciary & Crime § Property & Insurance Coverages § Directors & Officers Insurance § Fiduciary & Crime § Property & Casualty • Control of Well / Redrill • Physical Property • Loss of Production Income / Business Interruption • Third-Party Liability • Aviation, Auto Liability • Worker’s Compensation & Employer’s Liability 10

Professional Indemnity Coverages September 12, 2009 - September 12, 2010 Not to Scale Directors Professional Indemnity Coverages September 12, 2009 - September 12, 2010 Not to Scale Directors & Officers-$200 MM XL Insurance $10 MM xs $190 MM Chubb $10 MM xs $180 MM Endurance - Bermuda $25 MM xs $155 MM Energy Insurance Mutual $25 MM xs $130 MM AIG CAT- Bermuda $25 MM xs $105 MM Liberty $10 MM xs $95 MM AWAC $15 MM xs $80 MM Zurich $15 MM xs $65 MM Hartford $15 MM xs $50 MM AEGIS $25 MM xs $25 MM Chartis $25 MM Retention: $5, 000 50800120_1 Fiduciary Liability $50 MM AWAC $10 MM xs $40 MM Chartis $10 MM xs $30 MM AEGIS $10 MM xs $20 MM St. Paul $10 MM xs $10 MM AEGIS $10 MM Retention: $200, 000, except $5 MM for Security Claims Commercial Crime $50 MM Chubb $25 MM xs $25 MM Chartis $25 MM Retention: $500, 000 11

Property and Casualty Insurance Program 2009/2010 $400 MM Excess Liability $50 MM OCIL Excess Property and Casualty Insurance Program 2009/2010 $400 MM Excess Liability $50 MM OCIL Excess Liability $100 MM XL Excess Liability $50 MM XL Torus Excess Liability $50 MM Argo Excess Liability $150 MM $5 MM SIR $100 MM Owned $100 MM Non-Owned $40 MM Hangarkeep ers $25 MM Per. (3) Injury Marine/Offsh Aircraft USAIG ore Liability Statutor y Limits ACE Energy Package Excess Liability $15 MM / $30 MM $5 MM SIR Onshore General Liability $3 MM SIR $2 MM AIU Foreign Auto/EL Liability AEGIS £ 5 MM AIU UK EL Statutor y Limits AIU Scheduled Values $2. 8 M per day 180 days Max a. o. o. $250 MM (100%) Not to exceed $500 MM Areas a. o. o. III, IV $75 MM &V Energy (100%) Areas Package I & II Energy Package $4 MM SIR $1 MM $250, 000 (1) ACE Auto Liability $3 MM SIR $2 MM $250, 000 (1) ACE Employers Liability $10 MM Southern Marine (1) US WC Foreign WC (Volunta ry) (2) Cargo Energy Package Onshore/ Offshore Property OEE Agreed Values USAIG Aircraft Hulls (4) LOPI (1) (2) (3) (4) $1, 000 deductible plan $25 k deductible Limits actually carried are $275 MM for GIV’s and $100 MM for Citation (vs. “scheduled underlying” shown above) LOPI coverage in respect of Independence Hub only Energy Package: - PD/OEE subject to a $10 MM for Interest retention; LOPI 180 days waiting period - Excluding coverage for Named Windstorm (except Excess Liabilities) - Offshore PD/OEE/LOPI subject to an overall $750 MM limit and Onshore PD/OEE subject to an overall $250 MM limit (except Anadarko Tower/Timberloch Building which is insured on full value basis) 12

Property & Casualty Insurance § Property – Replacement Cost Value (ded $10 MM For Property & Casualty Insurance § Property – Replacement Cost Value (ded $10 MM For Interest) § Control of Well/Redrill/Pollution – $75 MM Onshore / $250 MM Offshore (ded $10 MM FI) § Third Party Liability – $400 MM limits (includes Pollution) (ded $5 MM FI) § Aviation Liability – $650 MM limits ($250 MM primary + $400 MM TPL) § Terrorism – full limits Offshore/Aviation/Woodlands Bldg /$25 MM sublimit for all other Onshore § Business Interruption – I-Hub only $500 MM limit (180 days waiting period) (excludes named-windstorm) 13

Flow of Foreign Insurance Anadarko Foreign Entity Locally Admitted Insurer KMILL London Insurance (Partner’s Flow of Foreign Insurance Anadarko Foreign Entity Locally Admitted Insurer KMILL London Insurance (Partner’s Share and/or (Captive) APC’s share if mandatory) Anadarko’s Corporate Insurance Package 14

Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY Risk Management Process CONTROL TRANSFER BY CONTRACT MONITOR FOR CHANGE IDENTIFY RISKS TRANSFER BY INSURANCE ASSUME 15

Significant Uninsured Risks (for which coverage may be available) § Pre-existing liability (pollution, toxic Significant Uninsured Risks (for which coverage may be available) § Pre-existing liability (pollution, toxic tort, etc. ) in acquisitions § Gradual pollution § Business interruption (except I-Hub) § Political risks § Unauthorized trading § Terrorism – onshore § Hurricane damage for offshore platforms § Tanker Pollution ? § Consequential Damages ? 16

Anadarko Risk Bearing Capacity Study 17 Anadarko Risk Bearing Capacity Study 17

Background • APC’s acquisition in 2006 of both Kerr-Mc. Gee and Western Gas Resources Background • APC’s acquisition in 2006 of both Kerr-Mc. Gee and Western Gas Resources in an all-cash deal • APC issued $24 billion in debt • Rating agencies downgraded APC two levels to the lowest level of investment grade • APC wanted to revisit previous decisions not to buy business interruption, named windstorm, & political risk in light of maintaining investment grade status 18

Risk Assessment Objectives • Establish APC risk appetite (Risk Bearing Capacity) in relation to Risk Assessment Objectives • Establish APC risk appetite (Risk Bearing Capacity) in relation to key financial measures • Investigate the impact of various, key risks on financial key financial measures and thresholds – Commodity price risk – Political risk profile in Algeria – Specific catastrophic scenarios for energy specific insurance risks • Develop a portfolio perspective for APC’s major risks • Develop “what if” scenarios for catastrophic exposures • Develop a framework to analyze the benefits of alternative risk management strategies 19

Determining Risk Appetite • Financials Used – APC Budgets & Forecasts • Key Metrics Determining Risk Appetite • Financials Used – APC Budgets & Forecasts • Key Metrics – Debt / Proven Developed Reserves (PDR) – (Retained Cash Flow Sustaining Capex) / Debt Retained Cash Flow (RCF) is CFFO before working capital changes less dividends • Thresholds • Volatility – Production – Oil and natural gas pricing (at multiple locations) • Funding Assumptions – Credit Facility at current annual interest rate • Hedging Strategy – Incorporated current oil and natural gas hedging strategies – Investment grade levels for each key metric 20

Impact of Pricing/Production Variation on Debt/Proven Developed Reserves Debt/PDR 2008 Breach Point 2008 Threshold Impact of Pricing/Production Variation on Debt/Proven Developed Reserves Debt/PDR 2008 Breach Point 2008 Threshold 2008 Forecast Confidence Level (%) 21

(RCF-Sustaining Capex)/Debt Impact of Pricing/Production Variation (RCF-Sustaining Capex)/Debt 2008 Forecast 2008 Breach Point 2008 (RCF-Sustaining Capex)/Debt Impact of Pricing/Production Variation (RCF-Sustaining Capex)/Debt 2008 Forecast 2008 Breach Point 2008 Threshold Confidence Level (%) 22

Algerian Risk Perils and APC • Confiscation, Expropriation, Nationalization, Forced Abandonment, and Selective Discrimination Algerian Risk Perils and APC • Confiscation, Expropriation, Nationalization, Forced Abandonment, and Selective Discrimination • Creeping Expropriation (Windfall Profits Tax - WPT) • Legal, Regulatory, and Licensing Risks • Strike, Riot, Civil Commotion • War • Terrorism & Sabotage 23

Algerian Risk Model • Begin with qualitative analysis • Use qualitative information to build Algerian Risk Model • Begin with qualitative analysis • Use qualitative information to build model assumptions • Vet model assumptions with APC risk management professionals • Generate “portfolio” model for Algerian sub-risks 24

Energy Package Risk Model Risks Modeled • Control of well, named windstorm in Gulf Energy Package Risk Model Risks Modeled • Control of well, named windstorm in Gulf of Mexico, pollution events, and fire events Data Sources • GOM projected production for APC and well information by region, public information regarding pollution events, property schedule, APC wind vulnerability assessment, Aon database Assumptions • Downtime, recovery costs, lost production, re-drill, reserve reclassification, and damage assumptions generated through collaborative effort • This information was used to generate exposure based parameters for frequency and severity 25

Total Cost of Risk Comparison Total Cost of Risk • The current insurance program Total Cost of Risk Comparison Total Cost of Risk • The current insurance program provides significant financial protection against catastrophic event scenarios Tail protection provided by current program Confidence Level (%) 26

(RCF-Sustaining Capex)/Debt Portfolio Impact of Risks 2008 Threshold “All Risk” includes insurance programs Confidence (RCF-Sustaining Capex)/Debt Portfolio Impact of Risks 2008 Threshold “All Risk” includes insurance programs Confidence Level (%) 27

Framework Observations and Actions • The likelihood that production and commodity price fluctuations was Framework Observations and Actions • The likelihood that production and commodity price fluctuations was determined – Action: subsequent decision to lock in cash flows and reduce downside volatility was supported • Algerian political risk is significant to APC – Action: insurance solution was considered, but not deemed best suited due to cost/benefit trade off 28

Framework Observations and Actions • Control of well and property exposure is low frequency/high Framework Observations and Actions • Control of well and property exposure is low frequency/high severity in nature, and potential losses are dampened due production profile diversification and asset resiliency • Current energy package program – Action: additional CAT insurance potentially considered in the future, but only if cost/benefit for CAT insurance becomes more favorable (current program is effective for CAT protection) 29

Synthetic Lease – Windstorm Insurance § “Synthetic” – own for tax but not for Synthetic Lease – Windstorm Insurance § “Synthetic” – own for tax but not for GAAP purposes § 3 deepwater GOM platforms § Lease requires windstorm insurance unless “commercially unreasonable” (defined as excessive costs or other unreasonable terms which are not justified in terms of the risk to be insured and is generally not being carried by others for similar operations) § Market quotes ~ $20 MM in premium for a $200 MM aggregate limit (10% rate on line) w/ $10 MM ded. Limited capacity at minimum rate-on-line. 30

Synthetic Lease – cont’d § Commissioned Willis to prepare a report to review past Synthetic Lease – cont’d § Commissioned Willis to prepare a report to review past offshore GOM losses from hurricanes (utilizing its database) § Findings: 1. Since 1994, offshore GOM structures have incurred $12 B in losses 2. Only $1 B related to deepwater structures a) $0. 4 B relates to collapse of drilling packages b) $0. 3 B relates to design flaw c) $0. 2 B relates to different design than our 3 structures d) net losses = $0. 1 B 3. Estimated value of GOM structures ~ $21 B 4. Plotted past hurricane paths to show that Anadarko’s deepwater GOM structures have been directly exposed to Ivan, Katrina, Rita, Gustav & Ike with minimal damage (< $1 MM) 31

Synthetic Lease – cont’d § Conclusions to Willis Report: 1. “Burn cost” = 0. Synthetic Lease – cont’d § Conclusions to Willis Report: 1. “Burn cost” = 0. 06% per annum (net) or 0. 50% per annum (gross) 2. Market rate (10%) represents 160 times (net) and 20 times (gross) greater than burn cost 3. Insurance market is not offering hurricane coverage for deepwater structures based on any sound technical rate approach 32

Synthetic Lease – cont’d § Commissioned ABSG Consulting / EQECAT to model expected damage Synthetic Lease – cont’d § Commissioned ABSG Consulting / EQECAT to model expected damage to these 3 specific platforms from Cat 1 – 5 hurricanes • § Findings = No expected damage until wind speeds exceed 170 mph (strong Cat 5) Surveyed 7 peer group companies who own similar deepwater GOM platforms and who are investment grade • Findings = none purchased commercial insurance 33

Synthetic Lease – cont’d § Other considerations: 1. Anadarko is investment grade (S&P BBB-) Synthetic Lease – cont’d § Other considerations: 1. Anadarko is investment grade (S&P BBB-) and can easily selfinsure $200 MM. 2. Arbitrator (“Nationally-recognized Insurance Expert”) was an insurance broker 3. Arbitrator’s decision was not sealed 34

Other RM Issues § Impact of Ike, Katrina/Rita § Impact of Commodity Prices (crude/gas) Other RM Issues § Impact of Ike, Katrina/Rita § Impact of Commodity Prices (crude/gas) § Impact of Financial/Banking Crisis § ERM (Enterprise Risk Management) § El Merk Project § Ghana Project 35