With the downturn in the U.S. oil economy, petroleum engineering and service companies are increasingly looking overseas for work. Many of the exciting developments in the petroleum industry are taking place in the developing countries, requiring parties to accept unique foreign risks. These risks can, in many cases, be covered by a small number of private sector political risk insurers and the Overseas Private Investment Corporation ("OPIC"), a U.S. Government agency, which offers political risk insurance and, to a limited extent, financing for American companies with exposures in the developing countries. This paper describes how those risks can be insured.

The Overseas Private Investment Corporation ("OPIC") is a United States Government agency designed to promote the economic development of less-developed nations by assisting United States citizens, corporations and their wholly-owned (95%) foreign subsidiaries in efforts to invest, or develop contractual relationships, in the third world. As a complement to the U.S. Agency for International Development, which finances projects on a government-to-government basis, OPIC's purpose is to facilitate the transfer of U.S. capital, technology and management skills by helping American companies establish a broad variety of projects in Latin America, Africa, the Middle East, the Indian Subcontinent, Asia and parts of Europe (Portugal, Greece, Yugoslavia, Ireland and Northern Ireland). Its political risk insurance and finance programs operate either independently of or in conjunction with the programs of the Export-Import Bank of the United States, the World Bank (including the International Finance Corporation), the regional development banks, foreign government supplier credit and political risk insurance agencies and private political risk insurers throughout the world. While Congress views OPIC as a development agency, corporate America views OPIC as an insurance company and a source of non-recourse (or project) financing.

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