A Review of the Nigerian Energy Industry

Oil & gas risks: Insurers brokers decry ‘unfair treatment’ by NNPC

Rosemary Onuoha

02 January 2012, Sweetcrude, Lagos – Some insurance brokers under the auspices of the Nigerian Council of Registered Insurance Brokers, NCRIB, have petitioned the Council about the hurdles placed by the Nigerian National Petroleum Corporation, NNPC, for qualification in oil and gas risk business.

According to the brokers, the NNPC is not given brokers fair treatment hence they are not comfortable with the enormous demand by the NNPC, to enable them qualify for oil and gas insurances.

Sweetcrude investigation revealed that NNPC has placed difficult hurdles to restrain brokers from qualifying for risks allotted to local brokers by the Nigerian Content Policy. About 34 brokers were engaged for the NNPC account in 2011, but the number was reduced to 14 in 2012, and findings have showed that the number may also reduce further this year.

President of the NCRIB, Mrs. Laide Osijo, said the NNPC has subjected brokers to enormous demand which most of them are wary about.

She said the operators were worried because they thought they would acquire more knowledge as they grow on the business, but the reverse is the case, as they are not given the opportunity to improve their knowledge on the job.

She said, “Honestly, in the area of oil and gas, the Nigerian Content Policy made provision for local operators to be trained, so that the business could be handed over to us. But what the oil and gas operators are doing is contrary to what is expected.

“What they are asking for was never envisaged when the law was provided. The NNPC is really putting more demands on brokers. We are worried because we thought we would acquire more knowledge as we grow in the business, but reverse is the case.

“We have undertaken oil and gas training at home and abroad, but with the restrain by the oil and gas operators, we can never put to test what we learnt. With the things they are asking for, barely can 10 brokers or even five qualify for the business. If they are doing it intentionally, where do we then put the local content law?”

She said the operators were supposed to be trained so that the foreigners would hand over the businesses to them, adding that if the operators are not given the practical training and exposure, how would they learn?

“The oil and gas operators have been unfair, but we will continue to strive until we get there. The first time they did it we had 34 brokers engaged, and the next one we had 14. We thought after getting 34, we would have a higher rate, but they went and reduced it. This year, they put so many conditions and at the end only few brokers will also be engaged.

“It is unfair to the local content law. The local content law is there to protect us and put food on our table, but the way they are asking for some many things, it is really disturbing. We will continue to strive to meet their demands.

“Honestly, the brokers are complaining. They are not happy about it, most of them have paid so much to certify many documents. Corporate Affairs Commission (CAC) gave us certification, but NNPC still want us to certify it. And they would give us short period within which they want us to implement these things,” she said.

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  • This complaint has become a recurring decimal each time payment of insurance premium liabilities become due for renewal cum payment. We had hoped that having become law, the Nigerian Content Act would address such concerns and recurring complaints.