Hess 2014 Annual Report Download - page 27

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Other Items
Emergency Preparedness and Response Plans and Procedures
The Corporation has in place a series of business and asset-specific emergency preparedness, response and business
continuity plans that detail procedures for rapid and effective emergency response and environmental mitigation activities.
These plans are risk appropriate and are maintained, reviewed and updated as necessary to ensure their accuracy and
suitability. Where appropriate, they are also reviewed and approved by the relevant host government authorities.
Responder training and drills are routinely held worldwide to assess and continually improve the effectiveness of the
Corporation’s plans. The Corporation’s contractors, service providers, representatives from government agencies and, where
applicable, joint venture partners participate in the drills to ensure that emergency procedures are comprehensive and can be
effectively implemented.
To complement internal capabilities and to ensure coverage for its global operations, the Corporation maintains
membership contracts with a network of local, regional and global oil spill response and emergency response organizations.
At the regional and global level, these organizations include Clean Gulf Associates (CGA), Marine Spill Response
Corporation (MSRC), Marine Well Containment Company (MWCC), Wild Well Control (WWC), Subsea Well Intervention
Service (SWIS), National Response Corporation (NRC) and Oil Spill Response Limited (OSRL). CGA and MSRC are
domestic spill response organizations and MWCC provides the equipment and personnel to contain underwater well control
incidents in the Gulf of Mexico. WWC provides firefighting, well control and engineering services globally. NRC and
OSRL are global response organizations and are available to assist the Corporation when needed anywhere in the world. In
addition to owning response assets in their own right, these organizations maintain business relationships that provide
immediate access to additional critical response support services if required. These owned response assets included nearly
300 recovery and storage vessels and barges, more than 250 skimmers, over 600,000 feet of boom, and significant quantities
of dispersants and other ancillary equipment, including aircraft. In addition to external well control and oil spill response
support, the Corporation has contracts with wildlife, environmental, meteorology, incident management, medical and security
resources. If the Corporation were to engage these organizations to obtain additional critical response support services, it
would fund such services and seek reimbursement under its insurance coverage described below. In certain circumstances,
the Corporation pursues and enters into mutual aid agreements with other companies and government cooperatives to receive
and provide oil spill response equipment and personnel support. The Corporation maintains close associations with
emergency response organizations through its representation on the Executive Committees of CGA and MSRC, as well as the
Board of Directors of OSRL.
The Corporation continues to participate in a number of industry-wide task forces that are studying better ways to assess
the risk of and prevent onshore and offshore incidents, access and control blowouts in subsea environments, and improve
containment and recovery methods. The task forces are working closely with the oil and gas industry and international
government agencies to implement improvements and increase the effectiveness of oil spill prevention, preparedness,
response and recovery processes.
Insurance Coverage and Indemnification
The Corporation maintains insurance coverage that includes coverage for physical damage to its property, third party
liability, workers’ compensation and employers’ liability, general liability, sudden and accidental pollution and other
coverage. This insurance coverage is subject to deductibles, exclusions and limitations and there is no assurance that such
coverage will adequately protect the Corporation against liability from all potential consequences and damages.
The amount of insurance covering physical damage to the Corporation’s property and liability related to negative
environmental effects resulting from a sudden and accidental pollution event, excluding Atlantic Named Windstorm coverage
for which it is self-insured, varies by asset, based on the asset's estimated replacement value or the estimated maximum loss.
In the case of a catastrophic event, first party coverage consists of two tiers of insurance. The first $300 million of coverage
is provided through an industry mutual insurance group. Above this $300 million threshold, insurance is carried which
ranges in value up to $2.53 billion in total, depending on the asset coverage level, as described above. Additionally, the
Corporation carries insurance that provides third party coverage for general liability, and sudden and accidental pollution, up
to $1.08 billion, which coverage under a standard joint operating arrangement would be reduced to the Corporation’s
participating interest.