Political Risks of Transnational Petroleum Investment: the Mitigating Role of National and International Insurance Programmes

As in the case of all foreign investments in general, political risk has been one of the more serious inhibiting factors in petroleum operations by transnational companies. In practice, however, these risks can be significantly mitigated or eliminated altogether, through the insurance programmes which are normally available to all foreign investors. This article reviews the petroleum activities of some of such programmes, notably those sponsored by the US Federal Government under the Overseas Private Investment Corporation (OPIC) and, more recently, by the World Bank under its newly created Multilateral Investment Corporation Agency (MIGA).