Insurance and Risk Management in Nigeria’s Petroleum Sector: Regulatory Requirements and Professional Practice

This study examines the regulatory requirements and professional practice standards for insurance and risk management in Nigeria's petroleum sector, assessing whether current provisions adequately protect against the sector's diverse operational risks. Petroleum operations generate significant financial, environmental, and reputational risks that require sophisticated insurance products and enterprise risk management systems. Using a professional industry survey approach, the research administers structured questionnaires to thirty risk managers and insurance brokers specialising in petroleum sector coverage in Lagos, Port Harcourt, and Abuja. Regulatory requirements from the NUPRC, NMDPRA, NAICOM, and the PIA 2021's decommissioning fund provisions are reviewed as the normative framework. Findings indicate that local insurance market capacity for large upstream petroleum risks remains limited, resulting in high reliance on London market reinsurance and underinsured liability exposures for smaller operators. The study recommends expanding the National Insurance Commission's petroleum specialist capacity and creating a mandatory local insurance content target for petroleum risk covers. Keywords: insurance, risk management, petroleum sector, NAICOM, Nigeria.