diff --git a/opm/autodiff/CPRPreconditioner.hpp b/opm/autodiff/CPRPreconditioner.hpp
index 1dbd627db..c30b6e1b1 100644
--- a/opm/autodiff/CPRPreconditioner.hpp
+++ b/opm/autodiff/CPRPreconditioner.hpp
@@ -178,7 +178,31 @@ createILU0Ptr(const M& A, double relax,
         Dune::OwnerOverlapCopyCommunication<I1,I2>,
         Dune::SeqILU0<M,X,X>
         > PointerType;
-    Dune::SeqILU0<M,X,X>* ilu = new Dune::SeqILU0<M,X,X>(A, relax);
+    Dune::SeqILU0<M,X,X>* ilu = nullptr;
+    int ilu_setup_successful = 1;
+    std::string message;
+    try {
+        ilu = new Dune::SeqILU0<M,X,X>(A, relax);
+    }
+    catch ( Dune::MatrixBlockError error )
+    {
+                message = error.what();
+                std::cerr<<"Exception occured on process " <<
+                    comm.communicator().rank() << " during " <<
+                    "setup of ILU0 preconditioner with message: " <<
+                    message<<std::endl;
+                ilu_setup_successful = 0;
+    }
+    // Check whether there was a problem on some process
+    if ( comm.communicator().min(ilu_setup_successful) == 0 )
+    {
+        if ( ilu ) // not null if constructor succeeded
+        {
+            // prevent memory leak
+            delete ilu;
+        }
+        throw Dune::MatrixBlockError();
+    }
     return typename SelectParallelILUSharedPtr<Dune::SeqILU0<M,X,X>, I1, I2>
         ::type ( new PointerType(*ilu, comm), createParallelDeleter(*ilu, comm));
 }
diff --git a/opm/autodiff/NewtonIterationBlackoilInterleaved.hpp b/opm/autodiff/NewtonIterationBlackoilInterleaved.hpp
index 4eef1944e..2a8553c64 100644
--- a/opm/autodiff/NewtonIterationBlackoilInterleaved.hpp
+++ b/opm/autodiff/NewtonIterationBlackoilInterleaved.hpp
@@ -132,14 +132,37 @@ namespace Opm
                         AdditionalObjectDeleter<SeqPreconditioner> >
         constructPrecond(Operator& opA, const Comm& comm) const
         {
-            const double relax = 1.0;
-            SeqPreconditioner* seq_precond= new SeqPreconditioner(opA.getmat(),
-                                                                  relax);
             typedef AdditionalObjectDeleter<SeqPreconditioner> Deleter;
-            std::unique_ptr<ParPreconditioner, Deleter>
-                precond(new ParPreconditioner(*seq_precond, comm),
-                        Deleter(*seq_precond));
-            return precond;
+            typedef std::unique_ptr<ParPreconditioner, Deleter> Pointer;
+            int ilu_setup_successful = 1;
+            std::string message;
+            const double relax = 1.0;
+            SeqPreconditioner* seq_precond = nullptr;
+            try {
+                seq_precond = new SeqPreconditioner(opA.getmat(),
+                                                   relax);
+            }
+            catch ( Dune::MatrixBlockError error )
+            {
+                message = error.what();
+                std::cerr<<"Exception occured on process " <<
+                    comm.communicator().rank() << " during " <<
+                    "setup of ILU0 preconditioner with message: " <<
+                    message<<std::endl;
+                ilu_setup_successful = 0;
+            }
+            // Check whether there was a problem on some process
+            if ( comm.communicator().min(ilu_setup_successful) == 0 )
+            {
+                if ( seq_precond ) // not null if constructor succeeded
+                {
+                    // prevent memory leak
+                    delete seq_precond;
+                }
+                throw Dune::MatrixBlockError();
+            }
+            return Pointer(new ParPreconditioner(*seq_precond, comm),
+                                  Deleter(*seq_precond));
         }
 #endif