By Stephen Ubanna
Between 2018 and now, , the Nigerian Maritime Administration and Safety Agency, NIMASA, has championed the campaign for stakeholders in the nation’s Oil and Gas sector of the economy,’’ to consider a review of their trade terms from the Free On Board , FOB, contract to the Cost , Insurance and Freight , CIF, model ‘’ to ensure greater benefits for the country from its resources.
Bashir Jamoh, OFR, was said to have taken the Campaigns for the change of the country’s crude oil trade terms from FOB to CIF, in the International oil market to the 2023 edition of the Nigerian Oil and Gas Opportunity Fair, , NOGOF, being organised by the Nigerian Content Development and Monitoring Board, NCDMB, under the close watch of Wabote –Simbi, an Engr; in Yenagoa, Capital of Bayelsa, former President Goodluck Jonathan, home state, to speak out on the agency’s stand on the FOB and CIF, crude oil trade arrangements .
The NIMASA, Director General, who was said to have been represented at the Oil and Gas Fair by one Rita Uruakpa, Director of Cabotage services in the agency, was said to have lauded the efforts of the NCDMB Leadership at helping in the development of the indigenous maritime sector, stressing that whatever policies that had had had been developed under the current management of NIMASA,, to promote indigenous shipping are tailored ‘’to complement the efforts of the NCDMB’’.
An appreciative Jamoh, had commended the efforts of the NCDMB Leadership, at growing the indigenous maritime sector , such as the proposed Brass shipyard in the state.The NIMASA boss, was said to have assured the NCDMB, Authorities that ‘’the agency will continue ‘’ to strive for the development of the nation’s maritime sector by pursuing policies that will ensure the indigenous capacity is grown, which in turn will impact on the fleet expansion to position to be able to participate in the affreightment of the nation’s crude oil and petroleum products, particular, Premium Motor Spirit, PMS, popular, petrol,
As a prelude to increasing the indigenous ship owners fleet, the agency , according to insider sources has received the support of the House of Representatives ‘’to start the disbursement of the Cabotage Vessels Finance Fund, CVFF, Which has grown to $360 million over the last 20 years and still growing on a daily basis.
Until the House Committee, under the Chairmanship of Legor Idagbo, initiated interest in verifying the due process being followed by NIMASA, to disburse the funds, it was said to have requested the Jamoh led agency and the Federal ministry of Transportation, ”to provide it with detailed information on the total amount that had accrued to the Fund between 2003 and 2023 and disbursements till date”.
The Committee was said to have met Muazu Jaji Sambo, the Taraba state born politician and immediate pat minister of Transportation in May 2023, ‘’to find out about the details concerning the CVFF, but that was how far they could go.
The House Committee in their course of interaction with the NIMASA, and NNPCL, officials, including other sakeholders may have discovered that ‘’the lack of capacity amongst the indigenous /Coastal operators in Nigeria was the main reason why NNPCL, could not engage them to participate in the country’s crude oil lifting but awards the contracts majorly to foreign shipping companies in contravention of the Cabotage and Nigerian Oil and Gas Industry Content Development NOGICD , Acts. The Committee had confirmed that some of these contracts have been investigated leading to their cancellation.
The Value News learnt that in 2020, Jamoh , the Chief Executive Officer, CEO, of NIMASA, had taken up the matter of not awarding crude oil contracts to indigenous ship owners with Maikanta Baru, the then Group Managing Director, NNPCL. The duo were aid to have agreed to set up a Technical Committee , with members drawn from the agency , NNPCL and other stakeholders , with a mandate ‘’to develop a template for the desired change of the country’s crude oil trade terms , with workable timelines.
The Director General, NIMASA, may have used the opportunity of Billy Okoye , a General Manager, Crude Oil Marketing Division , NNPCL, visit to the agency, in 2020, to have revived efforts to change the terms of Trade for the affreightment of Nigeria’s Crude oil from FOB to CIF.
In Commercial language , ‘’under the FOB trade terms, Nigeria has no control over the delivery of its crude oil as regards ‘’to carriage , insurance and other ancillary services’’. This is because the FOB, term favours the foreign shipping firms, as ‘’the crude oil buyers reserve the right to nominate the ship’’, which are mostly the super tankers, about 300,000 tons, described as global trading ships that will carry their cargo from Nigeria to the International Crude oil market. According to NNPCL sources, this has been the trend for over the last 40 years.
Jamoh led maritime regulatory agency may have supported the change from Crude oil trading arrangement OFFOB to CIF, because under the later, ‘’the country would maintain simple control over the distribution of its oil which can be leveraged on to enhance the competitive advantage of indigenous operators’’. More so, 70% of the agency’s yearly revenue comes through the sale of Crude oil and Gas.
There is no gain saying the fact that the CIF trade arrangement if agreed by the NNPCL, as being alleged, would empower Nigeria ‘’to clear the cargoes for export and pay the cost of moving it to the port of destinations in Europe, United Kingdom, UK, he Asian country of China and the North American country of the United States, US. Note that’’ under the CIF, the seller purchases the cargo insurance while the buyer bears all risks of loss or damage’’.
Maritime analysts believe that the change of trade terms from FOB to CIF, would help the Ship owners Association of Nigeria, SOAN, to acquire bigger oil tankers of international standards that would assist them to take their rightful place in the trade of the country’s crude oil affreightment.
Ship owners under the aegis of SOAN and Nigerian Indigenous Shipowners Association, NISA, were said to have estimated that under the FOB freight arrangement, Nigeria loses N2 trillion yearly to capital flight to the European and Asia countries that own the supper tankers used in lifting the over 150 million tons of cargo , including petroleum products.
Hassan Bello, a former Executive Secretary, Nigerian Shippers Council. NSC, on his part had said that Nigeria spends about N700 billion on FOB contract on Crude oil lifting. The NCMDB, had estimated that the Nigerian economy lost over $700 billion in five decades by allowing its crude oil to be carried exclusively by foreign oil tankers.
Given the pressure from Jamoh led NIMASA, on the NNPCL, may have informed why the current management, led by Mele Kolo Kyari, may have made a commitment ‘’to award some of the crude lifting contracts of the country ‘’to the indigenous companies that have built capacity to the level that they can successfully eexecute these contracts with little or no supervision’’.
Jamo, who could not his feelings , was said to have thanked Kyari, the NPCL, GMD, and his management team, for their resolve ‘’to award maritime contracts to indigenous companies , expected to give strength to the Cabotage regime being championed by NIMASA.
Appealing to industry stakeholders for more support , THE nimasa, helmsman, noted that the CVFF , will evolve into greater benefit for more Nigerians , grow the country’s per capita income and Gross Domestic Product, GDP,through the maritime industry.
