Category: Energy insurance · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-05
Control of well insurance is the cover purchased by an oil and gas E&P operator to fund the costs of regaining control of an out-of-control well, plus redrilling, reworking and (under standard extensions) seepage and pollution costs; in most modern wordings it is functionally identical to Operators Extra Expense (OEE), with the terminology differing principally by market practice.
Category: Energy insurance Also known as: control of well cover, COW, well control insurance, Operators Extra Expense First codified: Lloyd’s wordings from 1970s; modern OEE forms developed by Joint Energy Committee Related legislation: Petroleum Act 1998 [1]; Offshore Installations (Safety Case) Regulations 2015 [2]; Marine Insurance Act 1906 [3]
‘Control of well insurance’ and ‘Operators Extra Expense’ (OEE) are terms used interchangeably in most modern energy insurance markets to describe the same product: cover for the costs an E&P operator incurs when a well goes out of control. Historical terminology varied between markets — ‘control of well’ was the older US market terminology and ‘OEE’ the London market preference — but the substantive cover is the same, and modern London market and Lloyd’s wordings often use both terms together as ‘control of well / operators extra expense’ [4][5].
The cover addresses the very large costs that can be incurred in regaining control of an out-of-control well (most dramatically a surface blowout, but also slower-developing events such as casing failures, underground blowouts and sustained casing pressure events). The cover responds for the specialist intervention contractor’s charges, the mobilisation of support equipment and vessels, the costs of redrilling the well to the same depth and (under extensions) the costs of remediating seepage and pollution arising from the event [4][5].
The canonical full treatment of the cover structure, market practice and limits is at Operators Extra Expense. This entry exists to address readers searching for ‘control of well insurance’ and to make clear that the two terms refer to the same product set [4][5].
Control of well insurance is governed by the same legal and regulatory framework as OEE:
The Petroleum Act 1998 vests UK oil and gas resources in the Crown and provides for the licensing regime. The PEDL (onshore) and Production Licence (offshore) impose operational and environmental obligations on the licensee, including duties to prevent and respond to well control events [1].
The Offshore Installations (Safety Case) Regulations 2015 (offshore) and the Borehole Sites and Operations Regulations 1995 (onshore) set the safety framework. The HSE’s Offshore Division regulates offshore well control management; for onshore wells, regulation falls between HSE, the Environment Agency and the relevant Mineral Planning Authority [2][6].
The Offshore Pollution Liability Association (OPOL) provides additional financial security for UK Continental Shelf operators in respect of pollution from offshore facilities, complementing the pollution sections of control of well cover [7].
The contractual framework between licensee, operator and drilling contractor — typically based on the IADC Daywork Drilling Contract or a bespoke equivalent — allocates well control risk between operator and contractor on a knock-for-knock basis. Insurance arrangements track this allocation, with the operator typically purchasing control of well cover for its own account and the contractor purchasing rig hull and machinery for its rig [4][5].
The market practice for control of well cover is detailed in the OEE entry. In summary: cover is placed by the operator on a per-well or programme basis; limits per event range from US$25m for simple onshore wells to US$1bn or more for high-risk deepwater wells; the wording has three principal sections (control, redrilling, seepage and pollution) plus standard extensions; and premium is a function of the limit, the risk profile of the well, and the cyclical state of the energy insurance market [4][5].
US-style ‘control of well’ wordings have historically had certain technical differences from London-style ‘OEE’ wordings, including (in older wordings) different treatment of underground blowouts, different definitions of the well-control event triggering cover, and different sub-limit structures for pollution. The 2010 Macondo (Deepwater Horizon) blowout drew sustained attention to the differences in cover scope between markets and prompted significant wording revision. Modern wordings on both sides of the Atlantic have largely converged, though specific endorsements and operator preferences continue to require careful comparison [4][5].
For drilling contractors, control of well cover is generally not purchased: the drilling contract allocates well control risk to the operator, with the contractor relying on its rig hull and machinery cover for damage to its own equipment plus standard liability cover for personal injury and property damage. Some drilling contractors do purchase ‘sub-contractor’ OEE cover as a back-stop where the contract terms create direct contractor exposure for well control, but this is the exception rather than the rule [4][5].
The variations of control of well cover are the same as those for OEE:
Per-well cover for specific high-risk wells.
Programme or fleet cover for portfolios of wells.
Underground blowout cover for fluid migration below the surface.
Workover and well intervention OEE for events arising during workover or intervention rather than drilling.
Seepage, pollution and contamination cover under section C (with sub-limits and exclusions typical of the market).
Standalone control of well cover for non-OEE risks is not a common product in the contemporary market; the comprehensive nature of modern OEE wordings means that most well-control needs are met by the standard product, with bespoke modifications where necessary.
A US-based independent E&P operator drilling in the Gulf of Mexico purchases ‘control of well’ cover for a single high-pressure high-temperature well at a limit of US$750m per event. The wording is on a US-style control of well form with London market endorsements aligning the underground blowout and seepage and pollution sections with the latest OEE practice. Premium for the per-well cover is approximately US$3.2m for the planned 200-day drilling programme. Functionally and commercially the cover is the same as a London-market OEE placement; the choice of label reflects the operator’s home-market practice and the predominantly US-based following markets on the placement. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote