BPMIGAS uses national insurance to protect 2 upstream vessels
Saturday, October 29 2011 - 02:34 AM WIB
The insurance protection was provided by Promindo, a group of Indonesian maritime insurance firms. BPMIGAS however did not mention names of the domestic insurance companies forming Promindo.
FPSO Kakap Natuna is operated by Star Energy in Riau Islands province, while FSO Cinta Natomas supports the operation of joint operating body (JOB) Pertamina-Petrochina East Java.
?The move should encourage other vessel owners operating in domestic upstream oil and gas activities to follow the example,? said Rudi Rubiandini, Deputy Chairman for Operation of BPMIGAS.
He said more and more Indonesian flagged vessels are being utilized to support the offshore upstream oil and gas activities. This is in line with the implementation of the cabotage policy.
This is a good opportunities for domestic marine insurance companies.
Under the policy, foreign vessels are banned to ship passenger and/or goods between the islands and ports within Indonesian waters. Foreign vessels serving for domestic sea transportation activities shall remain in operation up to three years as from the promulgation date of Law 17 Year 2008.
The FSO and FPSO vessels are not exempted from the cabotage policy.
The increasing activity in offshore oil and gas activities is also driven by the government?s move to encourage oil and gas companies to explore deep water oil and gas reserves.
Based on BPMIGAS data, there are currently 560 vessels operating in offshore oil and gas activities to support various activities such survey, drilling, construction and operational supporting or other purposes.
Only few of these vessels have been registered under Indonesian flag. However, the number of vessels that have been converted to Indonesian-flagged vessel tended to increase.
?It will provide significant value (to the state) if insurance premiums are paid to domestic companies,? said Rudi Rubiandini.
Rudi said the supporting insurance companies must meet technical specification requirements in order to provide protection and indemnity to upstream oil and gas vessels. These companies should be able to cover various risks that may arise such as operational-related problems, human error, social aspect, legal and project delay risks.
The requirements and standards are high given high risks investment in the offshore oil and gas business.
Chairman of Promindo, Bambang Ediyanto, said that in the past risks protection for domestic vessels operating in upstream oil and gas sector is controlled by foreign insurance companies and institutions. This is due to high capital needed for general insurance companies to cover marine risks.
To address this issue a number of marine insurance companies set up Promindo to provide insurance protection to offshore supporting vessels. The purpose of the move is to reduce dependence on foreign marine insurance.
At present, 10 domestic marine insurance firms have become members of Promindo. The group has provided insurance risk protection to 86 units vessels, which have combined capacity of 150,000 total gross (GT) covered. ?This is still very small numbers given the total number of vessels operating in offshore sector,? said Ediyanto.
According to the data of Indonesia Ship-owners Association (INSA), currently there are 8,500 vessels operating in Indonesia. Of this, 650 units are operating in offshore oil and gas sector. The total capacity of these 8,500 units vessels reach 11 million GT. (romel/roffie)