ONGC buys $11,000m cover from United India

Oil and Natural Gas Corporation (ONGC) has taken an offshore package insurance policy from United India Insurance Company with an insured value of $11,000 million.

The annual package becomes effective from May 11, 2005. The insurance premium, at $19.95 million, is 17.19 per cent lower than the premium for the previous year on like-to-like basis; in rupee terms, the reduction is 19.12 per cent, said a company release.

Over the last three years, ONGC has achieved significant reductions in the premium from $49.97 million in 2002-03. These reductions could be achieved due to sustained focus on safe operating practices and facility inspection and certification by the management, coupled with four consecutive years of claim-free operations.

The risk surveyors of the lead underwriters rated ONGC risk as 'acceptable' for the second consecutive year, after inspection of ONGC's biggest offshore process complex and a detailed review of the operating, maintenance and safety practices in February 2005, said the release.

N Rangachary, former chairman, Insurance Regulatory and Development Authority advised ONGC management on the entire process. As much as 95 per cent of ONGC's offshore risk is reinsured overseas.

For the 2005-06 renewal, United India Insurance had sought competitive quotes from selected international broking firms of repute.

A team of ONGC executives led by director (finance) R S Sharma, along with the United India team led by chairman and managing director MK Garg, made presentations to the selected brokers and underwriters on ONGC's risk profile.