NIMASA: Jamoh Campaigns For Review Of Nigeria’s Crude Oil Trade Terms  In Yenagoa

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 .

Uruaakpa, A Director, In NIMASA, Delivering Goodwill Message At NOGOF, Yenagoa

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,

Mrs. Uruakpa, Greg Ogbeifun and Ms. Adie, AtThe NOGOF, Yenagoa

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.   

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