Oil and gas (Energy) insurance in Nigeria is a regulated class of business governed by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 and supervised by the National Insurance Commission (NAICOM). Operators must insure all insurable risks connected to their oil and gas operations with a Nigerian insurance company, arranged through an insurance broker registered in Nigeria. This guide explains the coverages the energy value chain needs, the local content placement rules that apply, and how to buy energy insurance correctly.
Key facts about Oil and Gas (Energy) Insurance
- Legal basis: Sections 49 and 50 of the NOGICD Act 2010 require operators to insure insurable oil and gas risks with a Nigerian insurer through a Nigeria-registered broker. Source: NCDMB and NAICOM insurance services guideline.
- Offshore placement: Placing a risk with a foreign insurer requires prior written NAICOM approval, granted only after local underwriting capacity has been shown to be fully exhausted.
- Local capacity pooling: The Energy and Allied Insurance Pool of Nigeria (EAIPN), promoted by the Nigerian Insurers Association and managed by Africa Re, was established to develop and coordinate local underwriting capacity, technical expertise, and risk-sharing arrangements for large oil, gas, petrochemical, and other energy-related risks in Nigeria
- Policy direction: In June 2022, NCDMB and NAICOM jointly launched the NCDMB/NAICOM Insurance Guidelines to strengthen compliance with local content requirements and increase the retention of oil and gas insurance business within Nigeria, supporting NCDMB’s goal of achieving 70% Nigerian content by 2027.
- Regulatory update: Under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, oil and gas insurance has been reclassified as energy insurance. The Act repealed the Insurance Act 2003 and established a strengthened regulatory regime, including higher capital and solvency standards, stricter licensing requirements, and enhanced supervisory oversight for insurers participating in the energy sector.
- Recommended action: Oil and gas insurance in Nigeria is the set of specialist policies that protect energy operators, contractors and service companies against physical damage, control of well, liability, etc across upstream, midstream and downstream operations. It is a compulsory class for licensed operations under the NOGICD Act, and cover must be arranged locally through a registered Nigerian broker.
What is Energy insurance in Nigeria?
Energy insurance in comprises specialist insurance solutions that protect operators, contractors, and service companies against physical damage and liability, exposures across upstream, midstream, and downstream operations.
Unlike traditional commercial insurance, energy insurance addresses highly specialised risks associated with oil, gas, and power operations, where a single incident can result in substantial financial, environmental, and operational consequences. As a result, energy insurance programmes for Nigerian operators are typically complex, highly tailored, and subject to extensive underwriting and negotiation.
To understand the wider role a broker plays in this arrangement, please see our explainer on who insurance brokers are in Nigeria.
When can a risk be placed offshore?
Risks may be placed with foreign insurers only after local capacity has been fully exhausted and prior written approval has been obtained from NAICOM. In practice, this requirement typically applies to large or highly specialised exposures that exceed the capacity available within the Nigerian market (insurance and reinsurance). Before offshore placement is approved, evidence must be provided to the Regulator, NAICOM that the available local capacity has been fully utilised.
What types of Energy insurance cover are available?
Oil and gas insurance in Nigeria covers physical assets, operational liabilities and financial losses across the energy value chain. Programmes are assembled from several specialist classes rather than a single policy, because a rig, a pipeline, a support vessel and a downstream terminal each carry a distinct risk profile. The right combination depends on where an operator sits in the value chain.
The main classes an energy programme commonly draws on:
| Coverage | What it protects against | Typical buyer |
| Operators extra expense / control of well | Control of Well ( cost of regaining a well that is out of control), Redrilling and Restoration cost, Seepage, pollution, cleanup and containment. | Upstream operators, drilling contractors |
| Energy property / physical damage | Physical loss or damage to production property e.g platforms, wellheads, pipelines and processing plant | Upstream and midstream operators |
| Construction all risks (CAR) and erection all risks (EAR) | Physical Loss or damage to a project while it is being constructed | Energy Companies (Upstream, Midstream , Downstream), Project Owners, EPC Contractors |
| Business interruption | Loss of revenue following an insured physical damage event | Operators across the value chain |
| Third-party Liability | Loss or damage to third parties (bodily injury, death) or damage to third party property arising from insured’s operations. | Operators across the value chain |
How is Energy insurance priced in Nigeria?
Energy insurance is priced on the specific risk rather than a fixed tariff. Underwriters assess asset values, operating environment, loss history, engineering and safety controls, and the sums insured across each class. Premiums for a large offshore programme differ substantially from those for a downstream retail operation, so figures are quoted case by case after a survey.
Pricing is influenced by both local risk conditions and international reinsurance market dynamics. As a result, premium rates fluctuate in response to global energy loss trends, reinsurance capacity, and the terms of the treaties that support Nigerian insurers.
A broker’s role is to present the risk accurately to the market, secure adequate capacity, and negotiate terms. This is where advisory quality directly affects cost. For a broader view of how businesses approach commercial cover, our guide to business insurance in Nigeria sets out the fundamentals.
How does NIIRA 2025 affect Energy insurance?
The Nigerian Insurance Industry Reform Act (NIIRA) 2025 repealed the Insurance Act 2003 and introduced a modernised regulatory framework for Nigeria’s insurance industry. Among its key reforms, the Act reclassifies oil and gas insurance as Energy Insurance, broadening its scope to encompass risks arising from oil, gas, and power operations.
It also introduces enhanced capital adequacy and risk-based solvency requirements, ensuring that insurers underwriting energy risks maintain the financial strength necessary to support large and complex exposures. In addition, the Act strengthens NAICOM’s oversight powers in areas such as licensing, capital adequacy, market conduct, and risk management, reflecting the significant scale, technical complexity, and potential severity of energy-related claims.Our detailed explainer on the Nigerian Insurance Industry Reform Act 2025 covers the reform in full.
Why use a specialist energy broker rather than buying direct?
A specialist energy insurance broker plays a critical role in structuring the insurance programme, securing appropriate local and international capacity, ensuring compliance with applicable regulatory requirements, and managing claims throughout the loss recovery process. Given the technical complexity of energy claims, which frequently involve multiple insurers and reinsurers, the expertise of a broker with deep sector knowledge can have a significant impact on claim outcomes.
The broker also ensures that risks accepted by insurers are adequately supported by reinsurance arrangements and, where foreign reinsurers are utilised, confirms that the security providers meet NAICOM’s minimum financial strength requirements.
In addition, the broker is responsible for coordinating regulatory compliance requirements associated with risk placement, including demonstrating the extent of available local capacity, supporting applications for offshore placement where necessary, and obtaining the requisite NAICOM approvals.
YOA Insurance Brokers is Nigeria’s first specialist energy insurance broker, and our energy insurance service is built around this compliance and claims responsibility. Digital and operational technology exposures in the sector are growing too, which is why many energy operators now pair their programme with dedicated cyber insurance in Nigeria.
Speak to YOA’s energy risk advisory team
If you operate, contract to, or service Nigeria’s oil and gas sector, a review of your current programme against the NOGICD Act and your actual exposures is the practical next step. YOA Insurance Brokers has advised energy clients since 1978 and can confirm whether your cover is both compliant and adequate. Request a free risk advisory session or contact our team to discuss a specific placement or claim.
Conclusion
Oil and gas insurance in Nigeria is both a legal obligation and a technical discipline. The NOGICD Act 2010 requires operators to place insurable energy risks with Nigerian insurers through a registered broker, and offshore placement is permitted only after local capacity is exhausted and NAICOM approves in writing. The most reliable way to stay compliant and adequately protected is to map every exposure and place cover through a NAICOM-licensed broker with genuine energy expertise.
Frequently Asked Questions
Is Energy insurance compulsory in Nigeria?
Yes. Under the NOGICD Act, operators must insure all insurable risks relating to their oil and gas business with a Nigerian insurance company, arranged through a Nigeria-registered insurance broker. Insuring offshore without exhausting local capacity and obtaining written NAICOM approval is a breach of the local content requirement.
Can a Nigerian oil company insure with a foreign insurer?
Only after local underwriting capacity has been fully exhausted and NAICOM has given prior written approval. This route is reserved for very large or specialised risks that exceed the combined capacity of Nigerian insurers and the local reinsurance pools. The broker must first document that local capacity is unavailable.
What does oil and gas insurance cover?
It covers physical damage to energy assets, well control and blowout costs, construction risks, business interruption, third-party liability, and the marine, aviation and workforce exposures attached to operations. A programme is assembled from several specialist classes matched to where the operator sits in the value chain.
Who regulates oil and gas insurance in Nigeria?
The National Insurance Commission (NAICOM) regulates insurance, and the Nigerian Content Development and Monitoring Board (NCDMB) oversees local content in the oil and gas sector. The two bodies issued a joint insurance services guideline in June 2022 to coordinate compliant placement of energy risks.
How much does oil and gas insurance cost in Nigeria?
There is no fixed tariff. Premiums are quoted case by case after a survey, based on asset values, the operating environment, loss history, safety controls and the sums insured across each class. Pricing is also influenced by international reinsurance markets, so a large offshore programme is priced very differently from a downstream operation.