Azerbaijan’s New Partner Selected to Insure Risks of ACG and Shah Deniz Oil & Gas Projects

Business Materials 17 July 2008 14:19 (UTC +04:00)

Azerbaijan, Baku, 17 July / Trend corr. U. Ismayilova/ "Azerbaijan's large insurance company Pasha Sigorta became a national insurance partner on Azeri-Chirag-Gunashli (ACG) and Shah Deniz offshore oil and gas projects," Pasha Sigorta's Director General Nofal Rzayev said on 16 July.

"After passing 1.5-year audit and certification in London, we will act as local official insurance partner on oil and gas projects," Rzayev said.

Agreement on insurance of operational risks for 2008-2009 will be signed in July. From Azerbaijan, the agreement will be undersigned by ВР - operator of ACG and Shah Deniz, broker MASH and world's large reinsurance companies. Presence of local insurer is required.

Previously, risks on ACG and Shah Deniz were insured by another company - Ateshgah, 1/3 of which stocks is owned by State Oil Company of Azerbaijan (SOCAR).

According to Ateshgah, it was engaged in insurance of building and assembly, operational risks during five years. But BP cannot work with one insurer for over 5 years.

"Furthermore, there is now no necessity to insure building and assembly risks, since the projects have passed to operation stage," Ateshgah reported.

Pasha Sigorta, with its authorized capital comprising AZN 4mln, has been operating in Azerbaijan since 2006 offering 29 types of insurance. In 2007, the company received the management quality certificate from Moody International Certification Services.

The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. The sides to the contract are ВР (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%).

The sides to the production sharing agreement on Azeri-Chirag-Gunashli field are BP (operator- 34.1%), Chevron (10.2%), SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), ITOCHU (3.9%) and Hess (2.7%). Required investments total $20bln.

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