LONDON (Yosefardi) – Salamander Energy Plc seeks a claim of approximately $20 million from insurance companies related to the drilling of North Kutei in Indonesia.
“A claim totalling approximately $20 MM has been filed for the cost of well control and loss of contractor equipment with an application for an early interim payment. A further claim for the cost of re-drill of the well will be submitted in due course,” Salamander said today, but provided no details of the insurance company.
The drilling campaign has so far resulted in the South Kecapi oil and gas discovery and a suspended potential gas discovery at North Kendang-1. Operations on the Bedug-1 exploration well continue.
Salamander said the drilling of the North Kendang-1 exploration well was operationally challenging as a result of experiencing high pressures, in particular, a large amount of rig time being expended in getting the well back under control having taken a severe gas kick.
“Following discussions between Salamander, the Indonesian lead Insurer, the loss adjuster appointed by insurers and the Indonesian regulator, it has been concluded that the operational challenges involved may have given rise to valid insurance claims,” Salamander said.
Salamander’s insurance coverage for drilling operations is placed under two separate programmes that provide coverage for costs of well control, restitution of a well through re-drilling and separately for loss of third party down-hole equipment.
The insurance claims comprise three elements:
1) recovery of costs associated with bringing the well under control following the kick;
2) cost of contractor equipment lost or damaged by the well control incident; and
3) costs involved in a re-drill of the North Kendang-1 well to the point where the kick was taken. (Ferdi Hasiman)