Local insurance firms, operating under the Insurance Consortium for Oil and Gas Uganda (ICOGU), have underwritten a substantial amount of $50.4 billion Ugandan Shillings (equivalent to 13 million dollars) in the oil and gas sector for the year 2023. This significant investment, part of a total investment of $20 million (approximately Shs77.6 billion), reflects the consortium’s commitment to providing insurance coverage for key projects in the sector.
The main projects covered by the consortium include the crude oil pipeline and the KingFisher project. Additionally, the consortium is exploring new opportunities to underwrite various risks associated with oil and gas operations, including contractors’ all risks, claims and loss adjusting, liabilities, business interruption, and reinsurance.
Mr. James Maguru, the leader of the ICOGU Consortium, highlighted the consortium’s involvement in major projects such as Tilenga, Kingfisher, and the East African Crude Oil Pipeline (EACOP) project. For the Tilenga project alone, the consortium issued three policies, generating a premium of $12.8 million. Similarly, policies issued for the EACOP project contributed $2.3 million, while the Kingfisher development project generated $5 million in premiums.
Despite the significant underwritten premiums, approximately 64 percent of the total has been collected, indicating a positive financial outlook for the consortium. Mr. Maguru emphasized the importance of locally placed insurance policies in mitigating risks associated with oil and gas projects.
Addressing the gradual pace of investment in the sector, Mr. Denzel Mensah, a Chartered Insurance broker, underscored the inherent risks involved and the necessity for cautious progression. He emphasized the need for expertise and capacity-building to effectively navigate the complexities of the oil and gas industry.
Recognizing the challenges and opportunities within the oil and gas sector, the insurance sector has organized a three-day symposium in Kampala. Mr. Janan Kisakye, CEO of the Uganda Insurers Association (UIA), identified the lack of human resource capacity as a significant obstacle. The symposium aims to facilitate discussions on skills transfer and address the evolving landscape of the oil and gas sector in Uganda.
