Saudi Aramco is looking to purchase insurance against war and terror attacks after a damaging drone and missile strike on a few of its oil facilities in September, two sources said.
Aramco, the world’s most prominent oil firm, has been looking for cover from insurers along with those based at Lloyd’s of London and elsewhere in the London market, they added.
The agency is seeking cover for centers in Saudi Arabia’s eastern region, its oil heartland, where it suffered the September attacks, one of the sources stated.
Aramco stated in the prospectus of this month’s planned listing that it didn’t insure against all risks, and its cover might not protect it from terrorism or acts of war.
At the launch of the IPO, which may very well be the world’s greatest and raise as much as $25.6 billion, Aramco stated that it didn’t expect the September 14 strike to have a substantial influence on its finances and operations.
Available insurance options vary from cover against a terror attack or sabotage by full coverage, which incorporates battle or civil war, along with compensation for the cost of business interruption.
An initial loss estimation from the strikes on Aramco’s facilities was 2 billion riyals ($533 million), a third source stated.
Aramco insures much of its property itself by a so-called a captive insurer, Bermuda-based Stellar Insurance.
Though one of the sources said Aramco has an “excess of loss” cover with global insurers for any property damage above $200 million, this doesn’t cover war or terror attacks, or revenue losses resulting from business interruption.
Aramco, which mentioned in October it had fully restored oil production after the September attacks on its plants, did have war cover around five years ago, the source added.