The Pakistan State Oil (PSO) has approached National Investment Company Limited (NICL) for insurance cover for its imports against any possible oil spill at the ports. PSO has informed the board that it was closely working with NICL on a plan to have an insurance cover against oil spill at any port and a final scheme will be announced shortly.
The information given to board indicates that PSO got the idea of insurance of possible future oil spill from British Petroleum (BP) oil spill incident that cost the international oil company $20 billion in financial terms, besides hitting hard its credibility.
The insurance cover against any oil spill incident will not only help PSO control financial cost, but also give an impression to the international oil suppliers that the state-owned marketing company is managing is affairs as per international safety and security standards.
BP's oil spill incident occurred in the Gulf of Maxico a couple of months ago. It cost the company huge money for remedial measures and cleansing of the sea. In toto the matter was taken up at the American president level and finally it landed the company into serious financial and administrative crisis. The company was asked to pay $20 billion dollar as penalty for which it is selling stakes in oil and gas sector across the glob including Pakistan.
"We got the idea of insurance cover for import against any possible future oil spill to minimise any future financial and administrative cost," the board was said to have informed by the company management. The board is said to have appreciated the idea of entering into an agreement with NICL for insurance cover for its oil import consignments. PSO imports major portion of its petroleum products and oil spill danger always exits at the loading and off-loading stage. Saudi Arabia, Kuwait, United Arab Emirates and Iran are major suppliers of petroleum products to PSO.
Pakistan's oil import bill per annum is crossing $10 billion mark now. With such a huge volume of import of oil, the supplier will undoubtedly appreciate PSO planning of having insurance cover against any oil spill at the ports in the future. PSO management informed the board that the planned insurance cover for import of oil would strengthen company's control and security system in local as well as international market.