Abiodun JIMOH
There is growing concern among insurers and brokers as the Nigerian National Petroleum Company Limited (NNPC Ltd.) has yet to finalize its 2025 insurance coverage, despite the imminent expiration of its 2024 policy on April 1.
Industry stakeholders expected NNPC Ltd. to issue letters of appointment to approved insurers and brokers before the federal government’s declaration of March 31 and April 1 as public holidays. However, as of March 28, no official communication had been made, leaving many in the insurance sector in suspense.
The delay is reportedly linked to the non-release of allocations from the 2025 national budget, which has affected insurance renewals across several Ministries, Departments, and Agencies (MDAs). Without these allocations, many MDAs are unable to fulfill their insurance obligations, leaving critical government assets potentially exposed to risk.
To mitigate this gap, some MDAs have asked insurance firms to extend their coverage for an additional month while waiting for budgetary approvals. This temporary measure, however, raises concerns about the sustainability of insurance protections and the financial stability of firms involved in government contracts.
For NNPC Ltd., the delay in securing new insurance coverage could have significant implications for its operations, given the scale and risk exposure of Nigeria’s oil and gas industry. Industry experts warn that prolonged uncertainty in insurance placements could disrupt risk management frameworks and complicate regulatory compliance.
As the deadline approaches, stakeholders remain on edge, hoping for swift intervention to prevent lapses that could leave key national assets unprotected.
