Avner Oil - Annual Report 2011 - Delek Energy Systems

including the Tamar and Leviathan reservoirs, changes in the market situation, regulatory and taxlaw changes, changes in priorities as a result of drilling and survey findings as well as due tounexpected events and the risk factors described in section ‎7.30 below.7.29 Insurance coverageThe Partnership, together with Delek Drilling and Delek Investment, purchased insurance coveragefor drilling and production in the Yam Tethys project, as set out below (the amounts of theinsurance are correct as of the preparation date of the report). The insurance amounts and liabilitylimits represent the share of the Israeli partners in the Yam Tethys project.CoverageInsured amount (USD millions)• Offshore property including the group’s sharein the production rig and offshore pipeline 411• Onshore property including the group's sharein onshore facilities 21Total insurance purchased 432• Loss of income insurance (1) following anincident covered in the insured facilities or (2)resulting from an event in IEC's Eshkol facility.• Political risk insurance including war and terrorrisk (1) onshore and offshore property (2) lossof income(1) 100(2) 25The total insurance amount will not exceed USD100 million.(1) 335(2) 100The insurance amounts and liability limits represent the share of the Israeli partners in the YamTethys project.The Partnership also purchased, together with Delek Drilling, Delek Investments and subsidiaries,liability insurance to cover their current operations and physical and property damage to thirdparties due to drilling and production operations of these companies, including accidental pollutiondamage. This insurance has a basic liability limit of USD 25 million per case and cumulative for theinsurance period covering the share of the partners in each of the projects, further coverage ofUSD one million per case and cumulative for the insurance period covering the share of thepartners in each of the projects and a third coverage of USD 100 million per case and cumulativefor the insurance period for 100% of the rights.Furthermore, the Partnership, together with the other companies listed above, has purchasedcontrol of well insurance for drilling operations in the following insurance amounts:For Yam Tethys and Noa drilling, a total amount (for 100% of the rights) of USD 150 million percase. For Leviathan 1, a total amount (for 100% of the rights) of USD 800 million per case. ForTamar, Dalit 1, Karish, Tanin, Dolphin, Block 12 in Cyprus, and Leviathan 2 and 3, this insurancecovers a total amount (for 100% of the rights) of USD 200 million per case. For the Tzuk Tamrurdrilling, this insurance has a liability limit (for 100% of the rights) of USD 25 million per case andcumulative for the insurance period.The Partnership also purchased, together with others, all-risk insurance for establishment of theTamar field development project of USD 2.2 billion for 100% of the rights.Some of the insurance policies listed above were drawn up independently and some as part of theNoble’s insurance policies.The insurances are subject to mortgage agreements and assignment of rights according tofinancing agreements that are prepared from time to time.It is noted that from time to time, the Partnership monitors changes in the value of thepolicyholder’s property, to adapt the scope of insurance purchased to the exposure relative to thecost of the insurance and the insurance available internationally for the energy segment.Consequently, the Partnership can decide to reduce the coverage purchased and/or the amount ofthe insurance purchased and/or can decide not to purchase any insurance for one risk or another.A-188