Aramco seeks to secure its facilities against the dangers of war

RIYADH (Reuters) - Saudi Aramco is seeking insurance cover from war and terrorist attacks after its oil facilities were damaged in September by drones and missiles, while one source estimated the losses of the latest attacks at more than half a billion dollars, sources said.

Two sources said Aramco, the world's largest oil company, was looking to cover insurance companies, including those based in Lloyds of London and others in the London market.

According to one source, the company is seeking insurance coverage for facilities in the eastern region of the Kingdom, the heart of its oil industry, where it was affected by the September attacks.

Aramco said in its listing that it did not insure against all risks, and that its insurance cover might not protect it from terrorism or acts of war.

At the launch of its IPO, which may be the world's largest and raise up to $ 25.6 billion, Aramco said it did not expect the September 14 attack to have any real impact on its finances and operations.

Damage insurance
A third source said initial estimates of Aramco's losses in the attack on its facilities were 2 billion riyals ($ 533 million).

Aramco insures much of its property itself through what is known as “captive insurance” through Stellar Insurance, based in Bermuda.

Another source said that Aramco also has insurance coverage against "excessive losses" with international insurance companies for any property damage exceeding $ 200 million, but does not include war, terrorist attacks or loss of revenue due to the disruption of activity.

Companies have become concerned about the possibility of attacks on their properties in Saudi Arabia, the world's largest crude oil exporter, after attacks that temporarily halted 5.7 million barrels per day of Aramco production, or more than 5% of global oil supplies.

A fourth source said a Saudi petrochemical company, like Aramco, was looking for insurance cover against the war in the eastern region where the attacks took place.

"We have received a lot of inquiries," said Scott Bolton, director of crisis management at EON, an insurance broker, adding that local and international companies were considering whether to cover such attacks.

One source said the cost of insurance policies against war and terrorist attacks in Saudi Arabia had risen "several times" since the attacks, but gave no further details on the prices.