The chairman of the Insurers’ Oil and Gas pool, Azim Tharani, has invited more insurers to join a consortium that will be used to cover the petroleum sector, when it opens.
Speaking to insurance chief executives at an Insurance Regulatory Authority (IRA) breakfast over the weekend, Tharani assured his audience that all efforts were being made to ensure their involvement would not be as risky as feared.
“Oil companies have insisted that all their suppliers must have adequate insurance to be able to play in the sector. Indeed premiums in this sector are juicy but the losses are even bigger … so there is a need for a pool,” Tharani said.
He added that there was a need to work faster since the sector was facing imminent changes.
“We have it on good authority that the government will soon invite bids for oil exploration since the Albertine area is still teeming with more oil resources,” Tharani explained.
The oil and gas insurance pool was set up in September 2014 after three years of discussions. The pool has a committee where Azim Tharani is the chairman, Miriam Magala (chief executive of Uganda Insurers Association) as secretary, as well as Bhaskar Nair of Jubilee Insurance and Bayo Folayan of NIC.
Magala explained that the discussions are still ongoing on the operation of the pool.
“It is planned to run a loose consortium, rather than a statutory entity on its own – thus the pool is a co-insurer with the various players. The players insure through the pool, and for now are restricting themselves to dealing with property and liability,” she said.
Later, the IRA chief executive officer, Ibrahim Kaddunabi Lubega, urged players in the sector to join the pool in big numbers.
“The pool is designed to raise $1m (Shs 2.9bn) as a minimum contribution, so members should not be shy to join.
“We are fortunate that the legal regime allows us to ensure that everything in the sector is insured locally before foreign players are let in. So, the insurance fraternity should not be left behind as the oil and gas sector develops,” he said.
Lubega emphasized that the IRA would not allow foreign players into the oil and gas sector until local capacity had been exhausted. According to both Tharani and Lubega, the oil and gas pool is expected to start taking up policies in the third quarter of 2015 (July).
Source : The Observer