Cost of Petrobas Coverage Jumps 650 Percent

Petrobas, Brazil’s state owned oil company, announced that it has finally been able to renew its insurance coverage, which was due to expire on Saturday, but with a rate increase of over 650 percent above the $7.5 million it paid last year to $48.8 million.

The increase is largely due to the losses suffered earlier this month when an explosion and fire ripped through the world’s largest oil rig, killing 10 workers, and resulting in a total loss when the structure sank. Det Norske Veritas, a Norwegian company specialized in surveying and assessing seaworthiness, is currently investigating the cause of the disaster, and is expected to issue a preliminary report next month.

According to a report from Reuters News Agency, a consortium led by Brazilian insurer Bradesco Seguradora had submitted the lowest million bid. It actually covers only one percent of the risk, the remaining 99 percent is covered by non-Brazilian companies, mainly through the Lloyd’s market.