The Hindu Business Line : ONGC slashes offshore insurance spends by 38%

According to a statement, it has brought down insurance premium for offshore assets by 38 per cent; the total premium payable for 2007-08 is $29.03 million, against $46.83 million last fiscal.

This new policy is effective from May 11, 2007 to May 10, 2008 the company said.

The renewal programme was managed by United India Insurance Company (UIIC), as the leader of the consortium of public sector insurance companies comprising NIAC, OICL and NIC.

The asset valuation of ONGC's offshore installations - production platforms and complexes, pipelines, rigs, and wells - has gone up by 23 per cent from $13 billion in 2006-07 to $16 billion in 2007-08.

"The drop in insurance premium, notwithstanding the augmented asset valuation, is mainly due to various risk improvement (mitigation) measures adopted by ONGC and the recent initiatives in preventing accidents in offshore installations," the company said.

ONGC's offshore package policy gets reinsured in the overseas market, with the risk retention with the Indian insurers being in the range of 10-13 per cent.

The board also took note of the reserve accretion and new oil and gas finds by the company.

In 2006-07, ONGC made 22 discoveries - nine by new prospects and 13 by establishing new pools.

The new prospects are: three in Cambay basin, one each in Mumbai Offshore, Assam shelf and Cauvery basin and three in East Coast Deep Water.

One of these deepwater finds has put Mahanadi Basin on the hydrocarbon map of India, the company claimed.

The ultra-deepwater discovery of Krishna Godavari offshore is the first ultra-deepwater discovery of the country.

During the year, ONGC's reserve accretion rose to 65.56 million tonnes of oil plus oil equivalent gas (mtoe), against MoU target of 52.5 mtoe.

Production during the period stood at 48.28 mtoe, resulting in reserve replenishment ratio of 1.36:1.

Further, the reserve accretion for the 10th Plan (2002-07) target has also been overachieved in terms of initial in-place as well as ultimate reserves, the company said.

The board noted that ONGC has completed major offshore engineering projects in April 2007 on schedule.

The company has completed four mega hi-tech engineering projects in the Arabian Sea (Mumbai offshore) recently.