Rosemary ONUOHA

Managing Director of Wema Bank Insurance Brokers, Mr. Gbenga Olawoyin,   has said that insurers and brokers need to ensure that adequate and competent skills are deployed and backed with robust energy reinsurance package in order to fully actualise the potentials provided by the Petroleum Industry Content Development Act 2010 and the NAICOM guidelines for oil and gas insurance business in Nigeria.

According to Olawoyin, professionals and insurers should thus position themselves to fully tap into the opportunities created by these regulations.

He said that it is important to the economy at large as more premium capital is retained within the country thereby preventing capital flight. Hence, the crucial need for collaboration by all insurance operators in the industry to begin to straighten things out and strategise properly.

He said that the major risk exposures in the oil and gas industry may be broadly categorised as reservoir risk, facilities risk and political and fiscal risk and out of these, there are insurable risks which are the focus of the insurance industry as they come from the upstream activities; exploration and drilling, production and processing of hydrocarbon and downstream activities; refining, petrochemical, marketing and distribution and transportation.

He said the upstream exposures are inclusive but not limited to blowout, removal of wrecks and debris, clean-up and containment, pollution, consequential loss/business interruption, and war and special perils.

Others are injury /death of workers, construction of platform, rig, pipe-laying whether offshore on onshore, third party liabilities, delay in start up, standby charges, additional work etc, communal strife, riot and strike, civil commotion and sabotage, and last but not least, kidnap and ransom, he said.

“Whilst it is agreeable that the downstream exposures are not as complex as those of the upstream sector, they include vapour cloud explosion, aircraft refuelling liability, fire and explosion perils, general third party liability (product and professional indemnity), transportation etc. hence adequate skills must be deployed,” he stated.