NU Online News Service, April 28, 12:12 p.m. EDT

The sinking of the Deepwater Horizon drill rig in the Gulf ofMexico will create a EUR40 million ($52.8 million) loss for Germanreinsurer Hannover Re, the firm said.

Its announcement came as the Coast Guard began efforts to burnsections of the 600-square-mile oil slick from the sunken rig. Theflow was threatening the ecosystem of the Louisiana coast,.

Hannover Re said despite the size of the loss involved, it issomething the company can handle.

CEO Ulrich Wallin said in a statement that, even with that loss,"we remain considerably below our major loss expectancy for thesecond quarter."

He said the loss estimate was based on a conservative evaluationof the current--still vague--information." A company spokespersonsaid no other details about the drill platform coverage could beprovided.

In addition to Hannover, other insurers and reinsurers reportedto have coverage on the rig were QBE Syndicate 1036 and Munich Re,according to Guy Carpenter's catastrophe information report of thedisaster. It said the rig's owner, Transocean, put the totalinsured value at $560 million.

Rig operator BP is responsible for cleanup and has already spent$30 million, according to Guy Carpenter. The firm said thatyesterday it had flow aircraft over the spill that sprayed 25,000gallons of oil dispersant.. Currently it said it is working on"designing interventions" to shut off the continuing leak from therig.

The installation blew up April 21 and sank the next day, leaving11 of the 126 workers on the platform missing and feared dead.

Coast Guard Rear Adm. Mary Landry said of the spill at a pressconference today that, "We are in a verious situation," but sheadded that it is "premature to say this is a catastrophe." She saidit was the first time the Coast Guard had dealt with a spill thatwas coming from a leaking well, but the service is prepared tohandle it. Winds today were said to be keeping the spill away fromshore.

Explaining the burn process, the Coast Guard said work boatswill consolidate the oil into a fire resistant boom approximately500 feet long and tow it to a more remote area, where it will beignited and burned in a controlled manner. The plan calls forsmall, controlled burns of several thousand gallons of oil lastingapproximately one hour each.

The marjority of the slick, the Coast Guard explained, will betreated with chemical dispersants and the burn will not affectother ongoing response activities, such as on-water skimming,dispersant application, and subsurface wellhead interventionoperations. Preparations are also underway in Louisiana,Mississippi, Florida and Alabama to set up a protective boom tominimize shoreline impact.

Meanwile BP and /Transocean continued efforts to stop the crudeoil still leaking from the well. The Minerals Management Servicewas reported to be inn contact with the oil and gas operators inthe slick area to discuss any concerns with Coast Guard operationsCurrently, no production has been curtailed as a result of theresponse activities, the Coast Guard said.

Currently the Coast Guard said there are more than 1,000personnel on- and offshore involved in the oil spill responseefforts and 70 vessels that have been deployed have recovered 6,206barrels of an oil-water mix.

Five staging areas are in place and ready to protect sensitiveshorelines. These areas include: Biloxi, Miss.; Pensacola, Fla.;Venice, La.; Pascagoula, Miss.; and Theodore, Ala., according tothe Coast Guard announcement.