Nigeria Lost $6.2bn In 2015 To Foreign Shippers On Oil Lifting

 Nigeria Lost $6.2bn In 2015 To Foreign Shippers On Oil Lifting

Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Maikanti Baru, said Nigeria lost about $6.2 billion in 2015v alone as a result of absence of a national shipping line that could lift petroleum products.

He said, the country specifically paid out $6,165,800,104 to foreign shippers who lifted a total of 771.69 million barrels (bbl), representing 107.18 million metric tons of crude oil in 2015.

Speaking at Ship Owners Association of Nigeria, SOAN, dinner in Lagos, Baru noted that the current freight rate for 130,000 tonnes vessel from West Africa-UKC/Med is $7.99 per tonnes.

According to him, “Assuming that the total tonnage of the nation’s crude oil was freighted to UKC/Med using a 130,000 tonne vessel (which could take 950,000bbl) it means that a total of $6,165,800,104 was paid to foreign ship owners. Some of these monies could have been saved if the nation had a national fleet for crude oil affreightment.”

Baru, who was represented by Group Executive Director, Downstream, NNPC, Mr. Henry Obi, said that the establishment of a national fleet for crude oil affreightment would help the country save some of the foreign exchange paid to foreign ship owners.

According to him, the establishment of a national fleet would reduce reliance on foreign ships for transportation of Nigeria crude oil. In case of an epidemic or war risk in a country, foreign vessels tend to avoid the country. However, the establishment of a national shipping fleet will help mitigate such challenge.

He said that the country lost related businesses worth approximately $3.5 billion as a result of non-patronage of local chandlers by shipping lines in the upstream sector. Therefore the establishment of national fleet will impact the downstream sector upon increase in local demand for fuel.

He pointed out that Nigeria once had a shipping fleet under a company called Nigeria National Shipping Line which history dates back to its establishment in1957. It started operations with three vessels in 1959 and by 1979 had 24 oceangoing vessels in its fleet but was later sold by government due to its dwindling fortunes.

Speaking also at the dinner,Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB, Engr. Simbi Wabote, said that the 2016 third quarter vessel categoriSation report indicates that 2,258 vessels currently operates in the Nigerian oil and gas industry and 235 of them were built in the country. 848 of them are Nigerian owned, representing 37.56 per cent.

For him, it is a marked improvement from what obtained in 2010 when over 90 per cent of the expenditure in the maritime segment of the oil and gas industry was lost to foreign economies due to the dominance of foreign owned vessels.

Wabote said: “Through the efforts of the board, NNPC has started to incorporate Nigerian content requirements in crude oil lifting bids. 28 Nigerian traders were successful in the 2014/2015 crude oil lifting term contracts and I expect that a higher number of Nigerian companies would be successful in the bid exercise that was held a few weeks ago.”

Also speaking, Lagos State Governor, Akinwunmi Ambode, said the Nigeria maritime industry of which the shipping sector plays a vital role in its development, is widely acknowledged to be in need of far reaching reforms in order to realign with global best practices. Ambode said that the industry has great potentials to be a major revenue earner and driving force for economic growth and development.

“For these potentials to be fully harnessed, there must be a convergence of ideas among stakeholders, including the ship owners association on how best to move the industry forward in the best interest of the economy and private investors. As a government, we are committed to do everything in our capacity to ease the process of doing business because this is the only way to attract investment to the critical sectors of the economy.

“The maritime industry is set to witness a major boost with the impressive progress we have recorded on the $2.6 billion Badagry Deep Sea Project which on completion will be the largest in Africa. We are encouraged by the interest already shown by international investors who are willing to partner with the state government to make the project a reality,” he said.


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