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New Crude Lifting Regime: Again, NNPC Sidelines Indigenous Shipping Firms

New Crude Lifting Regime: Again, NNPC Sidelines Indigenous Shipping Firms

  • Maritime Editors demand N150m Tramadol bribe identity disclosure from Customs
  • Post-pones 20thanniversary lecture        

Despite the introduction of NIDAS Shipping Services, into the international shipment of crude oil and petroleum products, which was expected to usher in indigenous participation in the carriage of Nigeria’s crude products; no Nigerian ship owner or Nigerian flagged vessel has benefited from crude oil carriage under NIDAS.

MMS Plus investigations reveal that Nigeria continues to lose the potential freight earnings estimated to be in billions of dollars as NIDAS only patronizes international vessels for the carriage of the nation’s crude and other petroleum products.

When the Nigerian National Petroleum Corporation (NNPC) announced the re-entry of its subsidiary, NIDAS Shipping Services, into the international shipment of crude oil and petroleum products in September, seven years after falling out of reckoning in the global oil freighting trade, oil and gas operators and ship owners expressed delight at the envisaged opportunities to grow local participation in the trade, but such aspirations are yet to materialize.

Speaking to MMS Plus on this issue, the President of Nigerian Indigenous Ship-owners Association (NISA) Mr. Aminu Umar said; “NIDAS is hiring international vessels and not Nigerian vessels to do the transportation. They keep on saying that Nigerians don’t have the vessels that can handle such cargoes.”

Although Umar agreed that most Nigerian ship-owners didn’t have the required vessels to do the business, he assured NNPC that a guarantee of the market would enable ship owners source funds to acquire the vessels.

“Yes, Nigerians don’t have such vessels but if the market can be guaranteed Nigerians would raise the money to buy the vessels. This issue can be likened to putting the cart before the horse” he said

Explaining the effects of patronizing foreign ships he said; “the freight earnings crude alone is in the region of billions of dollars. Since most of the ship owners are in Europe and other parts of the world, this means the money doesn’t come into the country. They don’t pay tax in Nigeria, they don’t employ Nigerians or have companies in Nigeria. The money doesn’t even go through Nigerian banks because they receive the earnings right from the comfort of their offices abroad and Nigeria benefits nothing”

He urged NIDAS to specify patronage by Nigerian ship owners or Nigerian flagged vessels, noting that foreigners could be patronized if they had their offices in the country at least to employ Nigerians and register the vessels in the country.

“What we are pushing for isn’t just for the Nigerian ship owner but to say it must be a Nigerian flagged vessel. Let it be a registered vessel under the Nigerian flag. This is what we are trying to develop. In promoting the Nigerian flagged vessel, we are talking about the Nigerian ship owner and Nigerian seafarers because that is the condition for registering a vessel under the Nigerian flag. We are still moving to that level to see NIDAS take more of Nigerian registered vessels instead of foreign registered vessels”.

When NIDAS was came on stream few weeks ago, its re-entry was said to be in tandem with the ongoing strategic re-engineering of some NNPC subsidiaries to ensure multiple income streams and value addition to the corporation in line with the aspiration of the corporation’s Group Managing Director, Dr. Maikanti Baru, a release by NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu stated.

The corporation explained that as a first step to regain its market position, NIDAS had established a robust chartering and operation desk in its UK office to help the company secure sea-going vessels from spot market to herald its market re-entry and foster strong competitive edge.

NNPC said that as part of strategy to ensure effective participation in the entire supply value chain, NIDAS would optimize right of first refusal offer in the NNPC annual crude oil term and Direct-Sale-Direct Purchase (DSDP) agreements with off-takers.

Under the terms of the deal, the off-takers are obligated to offer the NNPC shipping subsidiary the right of first refusal in freighting of cargoes.

The long-term aspiration of the company is to own and operate fleet to secure a significant market share in the global shipping market.

Meanwhile, the operators in the oil and gas industry have debunked the Federal Government claims of changing the trading policy from the regime of Free-On-Board, FOB, to Cost Insurance and Freight, CIF.

Also commenting on this, Umar said; “It is a misconception to say that the trade pattern has been changed from FOB to CIF. The only change has been the introduction of NIDAS. FOB is still the practice with the caveat that operators must take vessels through NIDAS”.

This reality contradicts the information peddled by respected heads of parastatals in the transport sector who maintain that the policy has been changed from FOB to CIF to give Nigerians the advantage in the affreightment of Nigerian cargo especially crude oil lifting.

Under FOB, Nigeria as a nation has no control in the distribution of its crude oil with respect to carriage, insurance and other ancillary services but, with a Cost Insurance and Freight (CIF) arrangement, the tide would change in favour of indigenous operators.

Recall that in 2017 NIMASA initiated the drive for NNPC/ Stakeholders collaboration to advocate for change of trade terms from FOB to CIF and the NIMASA Director General Dr. Dakuku Peterside as well as the Executive Secretary of Nigerian Shippers’ Council (NSC) Mr. Hassan Bello have announced in recent public fora that the policy has been changed.

 N150m  Tramadol Bribe: League of Maritime Editors Demands Disclosure of Importer’s  Identity

Suspecting half truth and outright concealment of facts on the seizure of 40 containers of tramadol, the League of Maritime Editors and Publishers (LOMEP) weekend called on the management of Nigeria Customs Service (NCS) to make public the identity  of the importer or importers  who offered the sum of N150million bribe  to the Customs  for  one of the containers to be released.

Noting that the Comptroller-General of the Service, Col. Hammed Ali(rtd) had told newsmen that the importer had offered the sum of $280,000 bribe for one of the containers to be released, the League said unveiling the personality was necessary as part of the war against corruption as well as importation of dangerous drugs that have ruined   many  Nigerian youths.

Besides, the League said such disclosure will put paid to speculations going round in the ports  industry that the claim by the Customs that an importer offered the money displayed during the press briefing in Apapa was in doubt.

Speculations have been that the so-called bribe  money  was  simply a make-up or contributions of some customs officers in the port  system for image redemption purposes.

In a statement signed by the President, Mr. Kingsley Anaroke and the Secretary General, Mr. Francis Ugwoke, the League argued that the only way the Customs management would convince Nigerians that an importer was actually the one who offered the money in cash is  to  unveil his identity.

The statement reads:, “We see no reason why the identity of the importer should be  kept secret. It should be made public as a deterrent to others wishing to do the same thing in future.  By exposing the culprits,  such action will further check importation of such dangerous goods into the country as the importer  knows the implication.

  “It is pertinent to request the Customs management to  institute an independent inquiry  into the issue of  corruption in the ports and border posts involving resident customs officers  in which the nation has continued to suffer billions of Naira revenue loss that  go to private pockets.

 “We also would like the CG to find out why some officers who were arrested over their indictment in the seized tramadol have been threatening to expose others involved in the scam if not treated well.

“We want the  Customs management to ensure that nothing happens to these officers as they could be target with their threat to expose  wrong doings in the system”.

Recall that the  Customs had recently  seized 40 containers of tramadol drugs with Duty Paid Value  (DPV) of   N7,318,978,065.00.

The  CG revealed that three suspects, among them customs officers and two others that cleared the  products  were  arrested  in connection with the seizures.

Ali  disclosed that the importers of the items had offered a whooping sum of N150million  just for one container to be released to them, an offer he said was rejected.

Incidentally, the Customs management has kept secret the identity of the importer or importers involved in the  importation of the goods into the country.


Meanwhile, the 20thAnniversary Lecture, Awards and inauguration of Patrons and Executives of the League of Maritime Editors and Publishers(LOMEP) earlier scheduled to hold on Thursday, 29 November,2018 has been shifted to Thursday, 24th January, 2019.

The event billed to take place at Sheraton Hotels, Ikeja, Lagos, will feature the recognition of deserving maritime industry leaders and reform agents as patrons and awardees.

While the Minister of Transportation, Mr. Rotimi Amaechi, who is the Chief Guest of Honour, is billed to give the keynote address,the Executive Secretary and Chief Executive Officer(CEO)of the Nigerian Shippers’ Council(NSC), Barr. Hassan Bello, who is the Guest Speaker, will deliver the lecture on the topic:“Indigenous Fleet Development, What Options?”

Some of the agencies and firm to be recognized under the corporate award category include: Nigerian Ports Authority(NPA) which got an award for “ Transparency and Infrastructural Development in Nigerian Ports”; Nigerian Shippers’ Council(NSC) , an award for “ Port Economic Regulations  in Nigeria”; Sifax Group, an award as “ Outstanding Indigenous Terminal Operator in Nigeria”.

 The founder of  the National Association of Government Approved Freight Forwarders(NAGAFF), Dr. Boniface Aniebonam,  was nominated for award under the individual award category for “ Promotion  of Capacity Building  in Freight Forwarding  Industry in Nigeria”

Also listed in the individual award category is former National President of the Association of Nigerian Licensed  Customs Agents(ANLCA), Prince Olayiwola Shittu, who is being recognized for “ Innovation in Customs Brokerage in Nigeria”.

   Among the special guests of honour are: Director-  General of the Nigerian Maritime Administration and Safety Agency(NIMASA), Dr. Dakuku Peterside, the Managing Director of National Inland Waterways Authority(NIWA), Senator Olorunnimbe Mamora, Governing Council Chairman  of Council for the Regulation of Freight Forwarding in Nigeria(CRFFN), Col. Tsanni Abubakar(rtd).

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