Changed stakes in ACG not to affect insurance contracts

Business Materials 8 July 2011 17:57 (UTC +04:00)

Azerbaijan, Baku, July 8 / corr Trend I.Khalilova /

Increase in participation share SOCAR's affiliated company AzACG in the Azeri-Chiraq-Guneshli fields deepwater development project by 1.6461 percent to 11.6461 percent will not change the contracts on risk insurance, the chairman of Azerbaijani Pasha Sıgorta Insurance Company Nofel Rzayev told Trend.

SOCAR purchased from BP part of share (earlier purchased by Devon) in ACG.

Pasha Sıgorta has been selected a local insurance partner of COP, and the development of the insurance part of the project is conducted jointly with American Marsh Insurance Broker.

"An insurance package is standard and independently on the size of share, it remains unified, Rzayev said. "We are strategic partner of project operator - BP, and the change of stake within the project does not have direct impact on insurance and reinsurance part of the project."

On the other hand, Pasha Sigorta will undertake the risks as a strategic partner of BP following appearance of new components in the Chirag Operating project, implying te contraction part.

Pasha Sigorta signed a contract on risk insurance on this project last week.

According to Rzayev, contracts are renewed every year and audit of the insurance company is carried out every three years to confirm the expediency maintaining it as a strategic partner for next three years.

Since 2008, Pasha Sıgorta has been a local insurance partner on projects on development of block of offshore Azeri-Chirag-Guneshli fields, Shah Deniz and Baku-Tbilisi-Ceyhan pipeline in the Azerbaijani sector of the Caspian Sea.

The joint agreement between the insurer and operator of oil and gas projects - BP - envisages a process of registration of insurance policies to cover operating risks, risks of liability and terrorism, and the risks of property within projects on development of block of offshore Azeri-Chirag-Guneshli fields and Shah Deniz gas field, as well as the risks of operation of the Baku-Tbilisi-Ceyhan pipeline.

Pasha Sigorta acts in partnership with the Marsh Broker Company and leading international reinsurance companies.

The Production Sharing Agreement on the ACG was concluded in 1994. Devon sold its 5.63 percent share in Azeri-Chirag-Guneshli in 2010 to its project partners - BP (3.29 percent), Chevron (0.99 percent), Inpex (0.96 percent) and Itocu (0.38 percent).

Currently the participation share of the operator BP in Azeri-Chirag-Guneshli is 37.43 percent, Chevron - 11.27 percent, Inpex - 10.96 percent, AzACG - 10 percent, Statoil - 8.56 percent, Exxon - 8 percent, TPAO - 6.75 percent, Itocu - 4.3 percent and Hess - 2.72 percent.

In 2010, Azeri-Chirag-Guneshli produced 40.6 million tons of oil compared to over 40.3 million tons in 2009. Production of oil from this block in 2010 averaged 823,100 barrels per day.

Pasha Sigorta is a member of Pasha Holding. It offers 30 types of insurance services to corporate and individual clients. The company authorized capital hits 30 million manat. Pasha Sıgorta is among the country's three leading insurers in terms of capitalization, maintaining at the same time, one of the highest figures of the profitability in the country's insurance sector.