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NEWS
Texas Oil Company Asks Federal Court to Stop Insurance Companies' $250 Million Demand for Additional Collateral
Wednesday, 11th December at 6:41 pm
Amended lawsuit alleges price-fixing, collusion, antitrust violations
An independent Texas oil and gas producer is striking back against a group of insurance companies, which collectively are seeking $250 million in collateral beyond what the oil company has already contracted for bonds backing its production activities.
The energy company, Houston-based W&T Offshore, Inc. (NYSE: WTI), is asking a federal judge to declare insurers have colluded to damage the company by jointly demanding additional collateral and premiums.
At the heart of the dispute are rules from the federal Bureau of Ocean Energy Management – BOEM – which require energy producers in the Outer Continental Shelf to provide a bond to pay for well, platform, pipeline and facilities cleanup if the operating company fails to do so.
Several years ago, BOEM imposed the idea of requiring small to mid-sized companies such as W&T to provide additional bonds. In over 70 years of producer operations in the Gulf of Mexico, the federal government has never been forced to pay for any abandonment cleanup operations associated with well, platform facility, or pipeline operations.
W&T's legal filing says that armed with that proposal, its insurers (also known as surety providers), including Endurance Assurance Corp., which is owned by Japanese insurance holding company Sompo and others, began demanding additional collateral for surety and indemnity agreements W&T already utilizes and for which it has already paid premiums.
Wednesday, 11th December at 6:41 pm
Amended lawsuit alleges price-fixing, collusion, antitrust violations
An independent Texas oil and gas producer is striking back against a group of insurance companies, which collectively are seeking $250 million in collateral beyond what the oil company has already contracted for bonds backing its production activities.
The energy company, Houston-based W&T Offshore, Inc. (NYSE: WTI), is asking a federal judge to declare insurers have colluded to damage the company by jointly demanding additional collateral and premiums.
At the heart of the dispute are rules from the federal Bureau of Ocean Energy Management – BOEM – which require energy producers in the Outer Continental Shelf to provide a bond to pay for well, platform, pipeline and facilities cleanup if the operating company fails to do so.
Several years ago, BOEM imposed the idea of requiring small to mid-sized companies such as W&T to provide additional bonds. In over 70 years of producer operations in the Gulf of Mexico, the federal government has never been forced to pay for any abandonment cleanup operations associated with well, platform facility, or pipeline operations.
W&T's legal filing says that armed with that proposal, its insurers (also known as surety providers), including Endurance Assurance Corp., which is owned by Japanese insurance holding company Sompo and others, began demanding additional collateral for surety and indemnity agreements W&T already utilizes and for which it has already paid premiums.
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Lnova :
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Lnova : “At the heart of the dispute are rules from the federal Bureau of Ocean Energy Management – BOEM – which require energy producers in the Outer Continental Shelf to provide a bond to pay for well, platform, pipeline and facilities cleanup if the operating company fails to do so.
Several years ago, BOEM imposed the idea of requiring small to mid-sized companies such as W&T to provide additional bonds. In over 70 years of producer operations in the Gulf of Mexico, the federal government has never been forced to pay for any abandonment cleanup operations associated with well, platform facility, or pipeline operations.”
Tysm for providing this info. I didn’t know about this