State-owned ONGC has insured itself against a possible environment damage due to its operations, unlike British Petroleum, which has no external insurance cover for environment damage. ONGC accounts for 80% of India?s oil and gas output and owns 3,800 km of sub-sea pipelines,

BP?s insurance protection is mainly for damage to its installations and the sunken rig, according to overseas reports. BP had chosen self-insurance through a captive insurer.

ONGC CMD RS Sharma told FE that the company?s insurance cover for offshore installations also covers possible damage to environment as well as any terrorist strike. The insurance cover is for $750 million.

British Petroleum?s cost of environment clean up and the liability to compensate those affected by the Gulf of Mexico oil spill is in the range of a few billions of dollars, as per some analysts? estimates. But in the Indian context, costs may not be as high. Also, unlike the US legal system, India?s company law does not allow class action suits against companies.

Class action suits enable groups of consumers to come together and claim compensation for injury from companies. Overseas reports said that shrimp fishermen in Louisiana have filed a class action lawsuit against BP alleging it of negligence.

?Besides, BP?s Gulf of Mexico oil well is 5,000 feet deep, while ONGC?s Bombay High is only 75 metre deep,? said another official, who asked not to be named. ONGC?s insurance coverage, therefore, is more than adequate, he said. ONGC took the the cover from United India Insurance Company Ltd, which in turn, has roped in the other three state-owned insurers?New India Assurance Company, National Insurance Company and Oriental Insurance company?to share the risk.

Another company official said that due to the risk mitigating efforts of the company, its insurance premium has come down. Although the valuation of ONGC?s offshore assets increased by about 5% this year to $26 billion, insurance premium has come down to $27.5 million from $34.1 last year.

?Although our safety standards are already high, I have reiterated that there should not be any complacency in meticulously complying with standard operating procedures,? RS Sharma told FE when asked about his response to the April 20 BP oil spill incident.