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The federal government is trying to reclaim nearly $350-million in insurance paid to Suncor Energy Inc. SU-T in the wake of political unrest in Libya.

The oil giant claimed $300-million in risk-mitigation payments for losses linked to Libyan energy assets after fighting between rival political factions spread to the country’s oil crescent region in 2015, a Federal Court judge said in a ruling this week. The total – $347-million with interest – was determined by an arbitrator.

But Export Development Canada, which insures against losses caused by political violence, argues that Suncor’s oil production facilities still deliver returns for the Calgary-based company.

“According to EDC’s May 15, 2022, notice of arbitration, the Libyan assets continue to have significant value and generate revenue for Suncor and its subsidiaries. EDC seeks to recover the amounts realized in connection with the assets until the $347-million has been repaid in full,” judge Christine Pallotta wrote in the decision Monday.

Suncor, which did not immediately respond to a request for comment, says on its website that operations there continue to be impacted by political upheaval.

“As of the end of 2015, production in Libya remains substantially shut-in given the political unrest. The timing of a return to normal operations remains uncertain,” the site states.

Suncor also froze exploration in the oil-rich country in 2011 after civil war broke out, culminating in the capture and killing of president Moammar Gadhafi. “The period of force majeure under its contractual obligations has since ended in Libya, and Suncor has restarted exploration activities,” the site says.

On Monday, the judge appointed an arbitrator to handle the insurance case and denied a request from four Suncor subsidiaries to be removed from it.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 01/03/24 4:00pm EST.

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SU-T
Suncor Energy Inc
+2.84%47.4

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