Saudi Aramco is seeking to buy insurance against war and terrorist attacks after some of its oil facilities were hit by drone strikes in September, sources said. They added that Saudi Aramco, the world’s largest oil company, had been seeking insurance from a number of insurers, including Lloyd’s of London and other insurers in the London market. Optional insurance covers everything from insurance against terrorist attacks to full coverage, including war or civil war, while also compensating for business interruptions.
One of the sources said the company was insuring its facilities in Saudi Arabia’s eastern province, which is its oil heartland, where the September attack took place. Saudi Aramco said in its prospectus this month that the company was not insured for all risks and that its coverage might not protect it from terrorism or acts of war.
The IPO is likely to be the world’s largest, raising up to $25.6bn. At the time of the IPO, Saudi Aramco said it did not expect the September 14 attacks to have a material impact on its finances and operations.
A third source said the initial damage from the terrorist attack was estimated at 2 billion riyals ($533 million).
Saudi Aramco insures most of its property through the bermuda-based Stellar Insurance, a so-called proprietary insurance company.
Although one of the sources said Saudi Aramco had also insured international insurers for any property damage of more than $200 million, it did not include war or terrorist attacks or lost revenue due to business interruptions.