Africa on cusp of boom in oil and gas industries: Local risk industry evolves to manage complex risks

With new oil and gas ventures multiplying in Africa, including significant finds in Uganda, Kenya and Mozambique, traditional African oil and gas producing giants Nigeria and Angola are not alone in managing the risks associated with the location, product

Africa is moving towards becoming self-sufficient in oil and gas production and, in time, is expected to become independent in petrochemical and hydrocarbon processing.

None of this will, however, become a reality “unless the continent also develops a risk management and insurance industry able to mitigate the very real, and potentially devastating, risks that face the energy sector” says Nicola Harris, Senior Vice President, Marsh Energy, Africa.

Given Marsh’s long association with and broad foot print in Africa, especially in the petrochemicals sector, “we are acutely aware of how critical managing risk is to the success or failure of oil, gas and energy operations on the continent – and how often they are overlooked” says Harris.

Determined to help grow an effective oil and gas risk management industry to compliment and facilitate Africa’s burgeoning energy industry, Harris in conjunction with the Marsh Energy International team have developed an energy insurance and risk management training course. The course is specifically tailored for energy executives, underwriters, employees of oil and gas companies, loss adjusters and banks providing credit or risk transfer to energy projects in Africa.

“The four day course is a mixture of academic and practical learning. At the end of the course participants tackle a scenario based on a real life crisis drawing on the combined expertise and learning of all participants” says Harris. The value of this practical application is that it allows participants from very different walks of life and disciplines to appreciate the full range of risks that face a complex oil and gas operation.

As such, these courses are “critical in growing the risk management skills sets needed to manage the continent’s booming energy sector” says Harris.

While the course is generally run privately for companies in Africa, the commercially accessible public courses run in Sandton attract participants from multiple disciplines and business – from all over the continent. “We’ve even had a Japanese participant working for an energy company in Australia contemplating an energy investment on the continent” added Harris.

Given the scale of investment and scope of risk facing even relatively small energy projects – especially in Africa – “understanding, predicting and mitigating risk is central to the successful development and operation of energy projects on the continent” concluded Harris.

Marsh’s next public Energy and Risk Management Course will take place in Sandton, Johannesburg from 8 – 11 April and can accommodate up to 25 people.