Feds try to reclaim $347 million insurance payout to Suncor linked to Libya unrest | 24CA News
The federal authorities is making an attempt to reclaim almost $350 million in insurance coverage paid to Suncor Energy Inc. within the wake of political unrest in Libya.
The oil large claimed $300 million in threat mitigation funds for losses linked to Libyan power belongings after combating between rival political factions unfold to the nation’s oil crescent area in 2015, a Federal Court decide stated in a ruling this week.
The whole — $347 million with curiosity — was decided by an arbitrator in 2019.
But Export Development Canada, which insures in opposition to losses attributable to political violence, argues that Suncor’s oil manufacturing amenities nonetheless ship returns for the Calgary-based firm.
“According to EDC’s May 15, 2022, notice of arbitration, the Libyan assets continue to have significant value and generate revenue for Suncor and its subsidiaries. EDC seeks to recover the amounts realized in connection with the assets until the $347 million has been repaid in full,” decide Christine Pallotta wrote within the resolution Monday.
Suncor, which didn’t reply to a request for remark, says on its web site that operations there proceed to be impacted by political upheaval.
“As of the end of 2015, production in Libya remains substantially shut-in given the political unrest. The timing of a return to normal operations remains uncertain,” the location states.
Suncor additionally froze exploration within the oil-rich nation in 2011 after civil warfare broke out, culminating within the seize and killing of president Muammar Gaddafi. “The period of force majeure under its contractual obligations has since ended in Libya, and Suncor has restarted exploration activities,” the location says.
Suncor first constructed up its presence in Libya by Harouge Oil Operations, a three way partnership with the state oil firm during which Suncor has a 49 per cent stake courting again to 2008.
With the 2 most important events within the court docket standoff unable to agree on an arbitrator, the decide on Monday appointed one to deal with the insurance coverage case and denied a request from 4 Suncor subsidiaries to be faraway from it.
The insurance coverage declare was paid underneath a coverage underwritten by Export Development Canada for Petro-Canada in 2006, which Suncor then got here into following their merger in 2009.
“The relevant claim related to Suncor’s oil operations in Libya was received following the Arab Spring movement that began in the early 2010s,” the Export Development Canada spokeswoman Jessica Draker stated in an e mail Wednesday.
“As EDC and Suncor are in active legal proceedings, we are limited in what we can share. … The ongoing arbitration between EDC and Suncor is a private process and is therefore confidential.’”
By the top of 2022, the publicity of the Crown company’s political threat insurance coverage portfolio sat at $359 million, down from $2.81 billion in 2015, in response to its annual studies.
“We stopped issuing new policies within this program in 2020,” the newest one states.
About 57 per cent of the portfolio lay within the Africa and Middle East area, a far greater share than every other space.
© 2023 The Canadian Press
