Ship-owners condemn NNPC’s FOB crude oil affreitment term

ABIOLA Seun |

Indigenous ship owners have condemned the Federal Government’s lack of support as the Nigerian National Petroleum Corporation (NNPC) insists on Free on Board (FOB) rather than Cost Insurance and Freight (CIF) trade terms in lifting the nation’s crude export and refined products import.

Describing the practice as “criminal,” the Director-General, Nigerian Indigenous Shipowners’ Association (NISA), Nnajiuno Ogbuagu, said during the World Maritime Day celebration in Lagos, that the term runs contrary to the Nigerian law and that the indigenous ship owners were not asking NNPC for favour.

Ogbuagu was responding to the statement by the NNPC Director, Marine Logistics, Ibrahim Lamin, who represented the corporation’s Group Managing Director, that most of the 25 indigenous coastal vessels and tugboats were unfit “to fulfil the criteria.”

Disclosing that the agency imports “35 cargoes in a month, which translates to over 1,260,000 metric tons,” he added that “there are no in-house vessels that can really accommodate our own type of fit-for-purpose work.”

However, Ogbuagu recalled that NISA had drawn the agency’s attention to the irregularities in its advertised tender last year, adding: “You don’t ask foreigners to tender for cabotage cargo in Nigeria. In the tender issue, no foreign vessel will be here and trade in Nigeria, whether it is NNPC or anybody.

“If you have issues with the vessels being given to you by Nigerians, you have NIMASA to complain to; and if NIMASA by their job certifies any vessel, no mother-vessel in Nigeria will refuse to accept that.

“It is not a new thing. Here in Nigeria, a foreign vessel will be dictating which Nigerian vessel will participate, it is not right. In the NIMASA Act, only Nigeria-registered vessels owned by Nigerians, unless it has waivers, can work in our waters. It is not about NNPC, so you people are breaching Nigerian law by that tender you are doing. It is criminal.

“The second is about the crude cargo. We have for many years talked about the CIF and FOB. That also is a law. In the NIMASA Act, 50 per cent of the bulk cargo must be lifted on Nigerian vessels. It is not about NNPC, whether you like it or not.”

Similarly, the moderator of the panel and Chairman of Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho, has lamented the loss of the whole value addition along the trade chain, including jobs, capacity acquisition and money.

He called for a review of the maritime policy provisions with respect to trade, arguing: “We bring the oil to the wellhead and sell it, and somebody brings his ship and takes the oil from there.

“All the value-added services that take on from there – attaching the ship to the oil, lifting oil to the refinery, refining the oil and bringing it back, attaching ownership to the face product and bringing it back to sell to us at bumper profit – we lose all the time.

“In a general sense, we don’t want to sell anything on FOB basis so that we add value to it here. So, it is not only the transport element that we are looking at when talking about oil, the refining element as well will be taken care of; about the jobs that can be created in maritime, we are losing quite a lot.”

Iheanacho further debunked the possibility of creditors seizing the ship if the cargo is sold on FOB and the carrier, Nigerian, as claimed by the NNPC, stating: “It is one big lie, it never happens.

“There is a big distinction between the owner of cargo and the person carrying it, and there are certain necessary conditions you have to fulfil, including the insurance, which makes it impossible for anybody to interdict a vessel purely because the owner is adjudged to be owning money.

“I’ve never heard it happen, and I want to say that I’ve spent over 40 years in the shipping industry. We should ask ourselves why we have been selling crude oil for over 50 years to foreign corporates that have no presence in Nigeria, and they take this crude to a refinery not located in Nigeria, refine it, bring it back on their ships and sell to us.”