Aon  |  Energy
Construction & Decommissioning

Onshore Construction

The downstream oil and gas sector is now also facing an increasing number of challenges in relation to onshore construction. Following a period of significant investment and capacity expansion - largely within the petrochemical and liquid natural gas (LNG) sectors - the volatility of energy prices, and the continuing uncertainty over supply and demand have contributed to an uncertain future. This has also coincided with an increasing number of ageing assets requiring investment at a time of extremely low margins. In an equally challenged construction insurance market, it is vital that all elements of a project are fully understood, and confidence conveyed to insurance partners to deliver the risk protection requirements of all stakeholders.

Offshore Construction

Driven by consumer demand and political pressure, investments into alternative and renewable energy projects have gathered momentum. Energy infrastructure projects have flourished over the last 10 years, but the volatility and rapid decline in oil & gas prices during the last four years has slowed this growth trajectory. As the potential return on investment becomes less economically viable, many construction projects have stalled or been abandoned altogether.

Offshore Decommissioning

The decommissioning of offshore oil and gas installations, pipelines and plugged and abandoned wells create unique risk exposures. For operators and contractors, the potential liabilities of decommissioning are intrinsic to each decommissioning project. The risk management strategy should be entirely bespoke and tailored to the project’s specific needs and objectives.

Risks at each stage of a project throughout its lifecycle need to be considered:

Initial Costs

  • Design and engineering
  • Project management
  • Procurement and fabrication
  • Lenders requirements

Storage & Transit

  • Onshore storage
  • Onshore & offshore transit
  • Supply chain risk
  • Delay in start-up


  • Offshore installation
  • Hook-up and commissioning
  • Delay in start-up
  • Waiting on weather


  • Removal of wreck
  • Pollution clean-up
  • Disposal

Violent and unpredictable weather conditions are impacting offshore operations. Energy companies can now limit the impact of weather on the profitability of offshore operations through a dedicated parametric insurance solution.


At Aon, we deliver:

We provide transactional and advisory solutions to our clients' business and risk-related needs (Click the hexagons for more information)

  • Risk Modelling & Consulting

  • Insurance & Risk Solutions

  • Claims Advocacy


  • Benchmarking

  • Transaction Services

  • Human Capital

Risk Modelling & Consulting

Aon’s risk consulting and actuarial teams have developed a three-step process to enable energy firms to make informed decisions about risk management. First, analysis is undertaken to identify the firm’s tolerance to financial shock. These insights are then considered against strategic objectives to determine a qualified risk appetite. Risk appetite is then modelled against loss and premium data to determine the risk profile. These data-driven insights enable us to design an insurance programme which optimises risk retention relative to commercial risk transfer options and alternative risk solutions; for example, self-insurance, captive solutions and/or mutualisation.