• What is OPIC?

    • U.S. Government Agency

      1. Designed to promote development through U.S. investment in LDC’s

      2. Obligations are supported by the full faith and credit of the U.S. Government

    • Operate at a Profit - $58 million in 1979

      1. Self-sustaing

      2. Due regard for risk management

    • Not in competition with commercial banks Operates either alone or in concert with:

      1. Commercial banks

      2. International financial institutions and regional development banks

      3. Eximbank and other suppliers’ credit organizations

    • Current Status

      1. Five projects - Jordan, Ghana, Egypt, Greece and Pakistan

      2. Over 75 registrations by more than 30 companies in 30 countries

    • Organic program designed to meet industry needs

    • All information provided to OPIC is accepted on a privileged information basis

  • Insurance Coverages

    • Availability--Exploration and development/production stages

      1. Investor can take one or more of the coverages

    • Inconvertibility - Coverage A

      1. Changes in currency transfer laws, regulations and procedures

        • Active blockage -- 30 days

        • Passive blockage -- 60 days

      2. Does not cover devaluation

      3. Measure of recovery -- transfer function: Local currency delivered in host country for dollars delivered in the U.S.

    • Expropriation - Coverage B

      1. Nationalization

      2. Creeping Expropriation

      3. Must last for six months

      4. Exceptions: For example

        • Bankruptcy

        • Provocation

        • Voluntary agreements

        • National government activity that does not violate international law standards

      5. Measure of recovery -- Net unrecovered costs (investment less cost recovery) in return for assignment of insured interest in project agreements

        • In convession agreements, where there is no cost oil/profit oil formula, such a formula would be imputed

    • War/Revolution/Insurrection - Coverage C

      1. Damage to physical property

      2. Special coverage for financial institutions

      3. Measure of recovery -- the lesser of original installed cost or cost of repair or replacement

    • Interference with operations - Coverage D

      1. Closure of project due to personal physical hazard of project employees for six months due to war/revolution/insurrection

      2. Measure of recovery -- net unrecovered costs in return for assignment of insured interest in project agreements

      3. During the first five years, either investor or OPIC may require a reassignment of interest in agreements to investor in exchange for return of compensation, without interest

Keywords:
strategic planning and management, US government, project management, Upstream Oil & Gas, asset and portfolio management, Guaranty, risk guaranty, recovery, petrol project, consideration
Subjects:
Asset and Portfolio Management, Strategic Planning and Management, Project management
Copyright 1980, American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.
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