Control of well insurance is essential to any business that is operating an oil well. Working with a reputable insurance company to get the correct coverage will ensure that your business is protected if your well has a blowout.
What is a well blowout?
A well blowout is caused by a change in pressure under the surface of the earth. When a well is being drilled, combustible hydrocarbons or unstable chemical compounds, flow unchecked. The high-pressure and flow rate make these hydrocarbons dangerous. If these chemical compounds ignite, they create a deadly firestorm called a blowout.
How do you prevent a well blowout?
While avoiding a well blowout is based partially on luck, there are preventative measures your business can take to mitigate the threat.
- BOP – A blowout preventer, or BOP, is a large valve on the surface of a well that can control the flow of oil and be capped to quickly shut off a well if a blowout happens.
- Pressure Tests – The pockets of pressure under the earth’s surface can intensify the problem if a well is susceptible to blowouts. Proper testing needs to be done frequently to help determine the chance of a blowout.
- Maintenance – Debris at the bottom opening of a well can add to the internal pressure of the well. By checking and clearing any clogging debris, the well will run freely and prevent blowouts.
Learning from Deepwater Horizon
The BP oil spill in April 2010 is a cautionary lesson to all oil and gas companies. Considered the largest marine oil spill in history, the Macondo blowout has shown how important control of well insurance is. After 5 months and several failed efforts to contain the flow, the well was capped. The end cost of this single blow out was $44 Billion! Blowouts can happen anywhere, to any well. Preparing for the worst keeps you protected against the cost of a blowout.
What does control of well insurance cover?
After a blowout, many companies find themselves without capital to continue drilling. The proper insurance will help cover the additional expenses a blowout causes.
- Environmental clean-up
- Prevention of oil spreading
- Restoring the well
- Redrilling the well
In the event of a blowout, you need to ensure your business and well is protected. InSource Insurance can help you make the right decision for Control of Well Insurance for your business to help with a blowout.