June 27, 2005 by Canadian Underwriter
The Athabasca Oil Sands Project Joint Venture recently reached a settlement with
certain of its insurance underwriters under Section III of the policy issued in relation to the project, according to Western Oil Sands.
Profit loss due to insurance claims that arose from the Jan. 6, 20003 fire at the Muskeg River Mine motivated the Joint Venture settlement.
Under terms of the settlement, Western will receive $16.3 million from some of the policy’s section three insurance underwriters. Furthermore, Western will report these proceeds as a reduction in capital assets.
In an attempt to finalize a contingent settlement for its remaining share of the settlement proceeds, Western is trying to garner $27.7 million from those insurance underwriters that also subscribed to section four (cost overrun and start up delay) of the Company’s insurance policy.
The remaining amount will become payable to Western if it is successful in the arbitration proceedings, which persist with the section four insurance underwriters.