THE ROLE OF INSURANCE IN THE PETROLEUM INDUSTRIES IN NIGERIA

THE ROLE OF INSURANCE IN THE PETROLEUM INDUSTRIES IN NIGERIA

ABSTRACT : This project deals with the role of insurance in the petroleum industries in Nigeria. The economic recession which begin in 1981 is highly correlated to the decline in the average selling price of out due to recession in the world economic situation and oil glut in the international oil market. In order to avert the current recession in the economy. There is an urgent need to diversify the economy. Particularly to more meaningful expansion of the petrochemical, agricultural and steel industries. The role of oil therefore appear limitless as there can be no meaningful diversification of the economy without the use energy. Therefore, the development of the other sectors is more or less dependant on the oil industry. The aim of this research work therefore is to examine the activities of the oil producing companies operating in Nigeria, review the various policies of insurance covering the various exposures in order to determine the role played by insurance in the industry. To examine if the existing protection provided by the insurance industry is adequate and make recommendation for necessary improvement. The research is divided into five chapters. Chapter one deals with the introduction and a brief history of the operation at the oil producing and petrochemical companies and the scope of study and definition of terms. Chapter two deals with the literature review as they relate to the topic of study, while chapter three dealt on research methodology sub-divided into sources of data and method of investigation chapter four dealt on the analysis of data which was collected by interview while chapter five summarizes major findings, conclusion and recommendation as well as advice on further area of research.

Udokoro Chinweokwu S.

Department of Insurance

IMT, Enugu

TABLE OF CONTENTS

Title Page                                                                         i

Approval Page                                                                  ii

Dedication                                                                       iii

Acknowledgment                                                             iv

Abstract                                                                           v

Table of Content                                                              viii

CHAPTER ONE

1. Introduction                                                             1
2. Statement of Problems                                             4
3. Purpose of Study                                                     6
4. Significance of Study                                                       7
5. Scope of Limitation of Study                                    8
6. Definition of Terms                                                  9

CHAPTER TWO

1. Literature Review                                                     12
2. History of Oil Petrochemical Industry                      12
3. Types of Drilling Burgers/Platforms                         14
4. Drilling  Operations and Costing                             17
5. Pollution                                                                  17
6. Petrochemical Hazards                                            17
7. All Risk Offshore Policies                                         20
8. Blow-out Preventer Warrant                                     23
9. Liability Insurance                                                   24
10. Workmen Compensation                                         29
11. Fire Business Comprehensive                                  31
12. Commercial Vehicles/Heavy Equipment                  33
13. Insurance of Money                                                 34
14. Motor/Private Cars Comprehensive                         38
15. Group Personal Accident                                         38
16. Claims Experience, Reporting and Accessing          39

References                                                               41

CHAPTER THREE

3.0   RESEARCH METHODOLOGY                                  42

1. Sources of Data                                                       42
2. Primary                                                                    43
3. Secondary Sources                                                  43
4. Method of Investigation                                           43

CHAPTER FOUR

4.0   PRESENTATION AND DATA ANALYSIS                    45

CHAPTER FIVE

1. Summary of Major Findings                                    57
2. Conclusion and Recommendations                         60

Appendix “A”                                                           64

Bibliography                                                            66

CHAPTER ONE

1.1   INTRODUCTION

Before independence and shortly after, Nigerian depended solely on agricultural commodities for her foreign exchange earnings. The oil boom in the 70’s led to Nigeria economy becoming an oil economy with the resultant neglect of the agricultural sector. The boom attracted many oil producing companies

THE ROLE OF INSURANCE IN THE PETROLEUM INDUSTRIES IN NIGERIA