New Delhi, June 10 (IANS) State-run Oil and Natural Gas Corporation (ONGC) chairman R.S. Sharma Thursday said the BP oil spill off the Gulf of Mexico has become a ‘game changer’ for the hydrocarbon industry and will sharply increase insurance costs.
‘Right away, we find insurance costs already going up two-three times,’ he said at a conference on Energy Security, organised jointly by Hindustan Times, Confederation of Indian Industry and Siemens group.
‘It (BP oil spill) has been a game changer for the industry,’ he added.
‘Going forward, I see a very very difficult and very very challenging time for us to operate within India and outside,’ he said.
BP’s deepwater horizon rig exploded April 20 and has now become the biggest oil spill in US history.
‘There is much going more effort in terms of safety practices. The regulatory regimes are going to be much more difficult,’ said Sharma.
He added that at the state-run oil explorer ‘the policy intent we have is to increase production not at the cost of compromising safety’.
Sharma pointed out that ONGC recently got a third party to conduct a safety perception study.
‘And also twice every year, the insurance underwriters carry out a year risk assessment survey,’ he said.
He revealed that ONGC’s assets were not covered for 40 days In 2000.
But since then, ONGC’s safety standards have improved considerably. ‘This has improved our insurance cost substantially last year,’ he said.