Pasa Sıgorta to act as oil and gas project local insurer

Business Materials 11 July 2011 15:35 (UTC +04:00)

Azerbaijan, Baku, July 11 / Trend I. Khalilova /

The Azerbaijani Pasa Sıgorta insurance company has finishd signing contracts within BP's risk insurance for three oil and gas projects in Azerbaijan, Pasa Sıgorta Chairman Nofel Rzayev told Trend.

Pasa Sıgorta has been a local insurance partner in BP projects in Azerbaijan since 2008. The insurance projects are developed in cooperation with the U.S. Marsh insurance broker.

"Last week, Pasa Sıgorta renewed contracts to insure risks on the Azeri-Chirag-Guneshli, Shah Deniz and Chirag development projects," Rzayev said. "This implies increasing oil production on the Azeri-Chirag-Guneshli offshore fields."

He said the contracts are renewed annually.

A large audit of the insurance company is conducted every three years.

"Last year, we passed a large audit and were re-elected BP's insurance partner for 2010-2012," he said. "The negotiation process will be conducted in late 2012. However, BP is very pleased with our work. BP's central risk management in London expressed gratitude for the speed, right legal support, as a local insurance partner has a lot of
duties, which he must perform."

While evaluating the insurance company, the attention is paid to ensuring compliance with local laws, compliance with the requirements for local insurers, expediting the work of BP's Baku and London offices, U.S insurance broker Marsh, etc.

"The total amount of risk that the company passes on BP's projects can be equal to one third of all the risks taken by the entire insurance market of Azerbaijan," Rzayev said.

The fronting volume, which Pasa Sıgorta earns each year for work (consultation, experts' assistance on risk analysis, insurance policies and ensuring compliance with legislation) amounts to $300,000 for the the ACG basic contract, without taking into account the other
two projects.

The contract was signed in 1994 to develop large offshore oil field "Azeri-Chirag-Guneshli". The volume of the reserves hits 7 billion barrels. The capital investment exceeds $ 20 billion.

Rzayev said that Pasa Sıgorta also prepares to act as an insurer of a new project for the Shafag-Asiman exploration and production sharing perspective block.

The contract was signed between SOCAR and British BP.

In May, BP-Azerbaijan and Caspian Geophysical signed a contract to carry out 3D-seismic. The three-dimensional geophysical surveys will be launched from September 15. The reserves are estimated at 300-500 billion cubic meters of gas. The Shafag and Asiman structures are located 125 kilometers southeast of Baku.

Since 2008, Pasa 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 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 the projects.

Pasa Sıgorta acts in partnership with the Marsh Broker Company and leading international reinsurance companies.

Pasha Sıgorta is a member of the group Pasha Holding. It offers 30 types of insurance services to corporate and individual clients. The company authorized capital hits 30 million manat.