Oil companies ‘are facing greater risks’

Oil companies face the risk of underinsurance as world oil prices reach record highs, a global insurance broker and risk adviser warned yesterday.

“An increase in activity in the oil sector means that any major loss will cost more than ever to replace,” Marsh managing director Andrew George said.
“In recent years there have been many more projects commissioned such as offshore infrastructure including rigs and platforms, refineries and petrochemical plants, which may have been less viable with lower oil prices,” George said.

“This increase in demand, which has shown little sign of abatement in the Middle and Far East, directly impacts replacement values and project lead times.

“While many clients are actively addressing this issue many remain significantly underinsured,” he said.

Gulf Daily