The next level of the Nigerian oil and gas sector

Nigeria

Razzaq Abiodun, managing director of Lasaco Assurance, talks to The Energy Year about how recent policies will propel the Nigerian oil and gas sector to the next level and new trends the company is banking on to drive growth. Lasaco Assurance provides insurance services to Nigeria’s oil and gas players.

How will Nigeria’s recent energy-related policy changes benefit the country?
An important aspect of the NCDMB [Nigerian Content Development and Monitoring Board] policy strategy is the opportunity for the local market to develop and retain value within Nigeria. It has changed the market dynamics and redirected foreign investment. These policies affect more than the oil and gas sector; all associated services, from insurance to engineering and marine services, stand to benefit. It will retain educated individuals within our borders and evolve local expertise.
Additionally, the recently enacted PIA [Petroleum Industry Act] provides hope for the industry as positive regulatory changes related to governance, fiscal policy, transparency and accountability are sure to bring positive developments. If properly enacted, Nigerian policy aligned with the Decade of Gas will move us into a decade of prosperity.
Regarding accountability and transparency, the National Insurance Commission has launched an online, real-time software where all transactions can be monitored. This will help push the insurance sector and, in turn, the energy sector towards better services.

What kind of services does Lasaco Assurance provide to Nigeria’s oil and gas sector?
We have been operating as an insurance company for more than 40 years. We found our niche in the oil and gas sector, which we have supported for the past 25 years. We are pioneers in this regard, particularly concerning opportunities arising from the indigenisation trend. Our business plan entails diversification within the public sector, corporate accounts and services focused on individuals and groups. I am the fifth managing director of the company in 40 years, which speaks to our stability, consistency and long-term business platform.
We have an 8% footprint in the oil and gas market and are aiming towards 15% once we have fully bounced back from the recent years’ events. We are involved across the value chain and actively participate in most bidding processes. We work with Addax Petroleum, Seplat Energy, NLNG, ExxonMobil, Shell, TotalEnergies, Chevron, Agip, and some other major companies.
We have a strong and good relationship with NAPIMS [National Petroleum Investment Management Services] and are registered on the NipeX [Nigerian Petroleum Exchange], which provides us a good exposure to bids. We are known to have dedicated teams that respond promptly to all opportunities, hence our high number of RFQs [requests for quotation].

What would you cite as the key driver of your current success?
The foundation of our progressive growth lies within the stability and peaceful atmosphere of the company. We put an emphasis on internal capabilities, make sure to stay ahead of technological advances and have a workforce with diverse backgrounds and expertise that greatly contributes to the success of the organisation.
Over the last 6 years we have consistently paid out dividends to our shareholders. which speaks to the profitability and growth of the firm. In 2021, we grew the shareholders’ fund to about NGN 21 billion [USD 49.7 million]. These internal dynamics are attractive and position us as the first choice for investors looking to get involved in the Nigerian market.
Our expansion has been organic. Our strong capacity to pay claims and good relationships with reinsurance firms have given us a capacity of well over USD 204 million. We have leveraged advantages provided by local content regulations. We pride ourselves on being among the first five in the provision of oil and gas insurance in Nigeria.

What upcoming trends is the company positioning itself to take advantage of?
The oil and gas sector is not slowing down and most opportunities are yet to be created. The sector is evolving, and we are monitoring these changes and partnering with the right companies. We participate actively in NLNG’s Train 7 project and look to engage with other gas companies.
We are also working on expansion plans. We want to set up a subsidiary to concentrate on the property sector, where the potential for growth is huge. We have also set up another subsidiary involved in trading and investments, with which we will put a lot of focus on the new fintech trend.
We have built capacity in technological infrastructure and digitalisation platforms, which we believe will help us grasp on to new opportunities. Technology, automation and digitalisation are at the forefront of our outlook for the next five years. We want to continuously do better. Our main focus is on investment in technology, capacity building, improving our shareholder relations and attracting investors.

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