Frank Costa President of Berkely Offshore Underwriting Managers said the industry could not expect any governmental support for the new regime whatever the final figure.

“There is still some uncertainty around the details of what we will see,” he said. “What is certain is that the limit will rise and it certain that the economic damages cap will increase.

“There has been a number of figures mentioned in the immediate aftermath of the Deepwater loss and if what we are being told is true then while currently there is a commercial market for such exposures if the figure is increased to $500 million of $1 billion I struggle to believe as it currently stands there is the capacity in the market to provide the necessary coverages.

“What need to be done is to explain what the industry can and cannot do, but I feel sure what we will not see is a system where there is a government back stop in effect.

“The insurance industry will be asked to provide the coverage and if the figure is too high I fear for the smaller operators in the Gulf of Mexico as the cost of the coverage may well be prohibitive.”

He added the offshore market was operating in increasingly difficult conditions and the Deepwater loss proved the levels of risk which are faced by the operators and their risk carriers.

“Operating on these new frontiers provides an ever changing series of challenges both to the offshore industry and to those providing the insurance capacity to cover these activities.

“We have to look at how we can learn from the lessons of the past and prepare for the future.”