EDC insured Suncor’s Middle East misadventures

(Globe & Mail, Toronto, 7 February 2019) The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011. On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims. Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. EDC declined to answer most of The Globe’s questions about the Suncor policy.