Risk-Based Inspection Technique - Offshore Structures: Design, Construction and Maintenance - page 598

on shore. Furthermore, an oil spill can affect coral reefs or can destroy a tourist
area, as in Egypt, where the oil fields are near the tourist areas.
Estimated environmental loss calculations are presented in the following
equation.

C E = f ð d Þ × f F C + V C × min ð D P ,R Þg

(8.2)

Where

f ð d Þ = 1 d > d m (8.3)

2

d s − d

f ð d Þ = 1 + d ≤ d m (8.4)

d s

and where:

C E is the environmental loss, in USD; V C is the variable cost, in USD/bbl; F C is
fixed environmental cost, in USD; R is minimum released oil volume, in bbl;
D P is daily production, in barrel of liquid, bpl; d is distance offshore, in kms;
and d s is the maximum significant distance offshore, which is the distance
from the shoreline in km.
The calculations are followed only when the environmental loss, C E , has not
been determined for a given platform. The estimate is based on the assumption
that the environmental losses are proportional to daily production. The fixed
cost, F C , and the marginal (variable) cost, V C , depend on the location, in
order to account for the variations world-wide in the costs associated with
clean-up, regulations, and other factors.
Equation (8.2) also accounts for the increased environmental effects of near-
shore spills, where a spill is more likely to threaten beaches and other ecosys-
tems. In these locations, clean-up and regulation costs are likely to be higher
than in the open sea, where wave action and weather can dissipate and volatize
a large portion of a spill.
The value of the significant distance should be defined in each region
separately for each geographic location
Note that, for input variables that are unknown, the variables can revert to
default values.
It is worth mentioning that the environmental factor alone made the oil spill
that happened in the Gulf of Mexico in 2010 a disaster for BP: the cost may reach
60 billion USD according to new analysis from Moody

s, the rating agency. In
addition, there is also an effect on the reputation to the company. The reputation
factor should be considered another consequence of platform failure.

'

Business Losses
To assess the business consequences of a platform failure, two terms are
considered. First, there is the replacement cost of constructing a new platform.