An extreme risk modeller has estimated that if a category five hurricane was to track through the middle of the Gulf of Mexico it would cause damage and losses of more than $65 billion to US offshore energy platforms.

Insurance industry losses would likely be in the range of $15 billion.

The scenario is not so far-fetched as the first two hurricanes of the 2007 Atlantic season have both reached maximum category five strength as the tracked along the most southern edge of the Caribbean and into Central America.

A stable high pressure area that is normally to be found over Bermuda is this year much further south and is responsible for directing the hurricanes along the more southerly route, if the high pressure area was to shift further north it would increase the chances of a hurricane spinning through the heart of the Gulf of Mexico, an area containing many US offshore energy platforms.

California-based EQECAT, a subsidiary of ABSG Consulting, and the leading authority on extreme-risk modeling, believes a strong hurricane like Camille, a category 5, spinning through the centre of the Gulf would create losses greater than $65 billion with the insurance industry looking to cover around $15 billion of those losses.

For comparison, the estimated insured losses of last month's Hurricane Dean has been put at around $2bn, with this week's Hurricane Felix only expected to cause insured losses of around $200 million.

"Property damage alone could exceed $35bn and losses due to business interruption and reduction in production capacity could add another $30bn to the loss," said Richard Clinton, president of EQECAT.

"Industry insured losses are more difficult to estimate due to the changes in allocated insurance capacity, policy terms and limits following the large losses from 2004-2005 hurricanes, but could certainly be in the $15 billion range," Mr. Clinton said.

"Both the energy industry and the US economy face substantial risks due to Gulf of Mexico hurricanes. The EQECAT Offshore Energy catastrophe model can help exposed parties to better understand and manage that risk."

EQECAT arrived at its estimates using its new Offshore Energy model, which takes into account tidal surge, winds, currents, and mudslides to estimate damage to platforms and pipelines. Further damage and claims data was derived from the impact of hurricanes Ivan, Katrina and Rita.

Dr. Mahmoud Khater, EQECAT's chief technical officer, said: "Perhaps the most innovative aspect of the EQECAT model is the ability to quantify the risk of disruption of product delivery to onshore facilities due to pipeline damage. This assessment is possible through use of a network analysis that considers pipeline connectivity, redundancy and the impact of wave scouring and mudslides to determine residual pipeline capacity after a storm.

"The program estimates the initial loss of oil and gas product delivery capacity, and also takes into account the time necessary to restore full delivery capability. This is the first model that will enable users to plan for all major aspects of offshore damage and loss."