Insurance secured for decaying Yemen tanker before oil transfer

Insurance cover has been finalized for a decaying tanker moored off Yemen’s coast as part of the preparations for a complex oil transfer from the ship, people involved said on Monday.

UN officials have been warning for years that the Red Sea and Yemen’s coastline were at risk as the Safer tanker could spill four times as much oil as the 1989 Exxon Valdez disaster off Alaska.

Built in 1976, the tanker is anchored nearly five nautical miles off Yemen’s coast and holds about 1.14 million barrels of light crude oil which has been stuck on board for years unable to be offloaded in wartime Yemen, officials said.

Inspections were taking place before the oil transfer begins and it remained unclear how much longer this process would take.

Insurance broker Howden was appointed by the UN Development Program (UNDP) via a public tender to identify the insurable risks and arrange insurance cover for the ship-to-ship transfer, which was not a standard operation, the company said in a statement.

“Insurance became a critical element of enabling this salvage operation to proceed. Without it, the mission cannot go forward,” UNDP administrator Achim Steiner said in the statement.

Negotiations resulted in 13 different underwriting entities being involved, including Fidelis MGU as one of the lead underwriters, which was complex as the tanker is located in waters deemed high risk by the Lloyd’s insurance market, the joint statement added.

The war in Yemen caused suspension of maintenance operations on the Safer in 2015. The UN has warned its structural integrity has significantly deteriorated and it is at risk of exploding.