• Friday, June 14, 2024
businessday logo

BusinessDay

Frequent obstructions on Escravos channel hurt shippers, FG’s revenue

vessels

Large vessels are getting stuck across the Escravos channel, a tributary of the Niger River, which flows for 57 kilometres, ending at the Bight of Benin off the Gulf of Guinea where it flows into the Atlantic Ocean, due to low water levels causing economic loss to the Federal Government and hurting shippers.

Four ocean-going vessels owned by Matrix Energy and other ship owners/charterers including MV Adebomi 3, MT Matrix Triumph, MT Matrix Asa, and MV Zola have run aground within the last three weeks, according to a shipper.

Since the maximum draft at the channel during high tide is 6.2 meters, large vessels wait for high tides to navigate across the channel.

Some heavily-laden vessels have run aground requiring heavy machinery to get them out. Until they are towed, they clog the channel, obstructing vessels that follow draft rules on vessel capacity, and reducing how much revenue the NPA can earn as charges.

Operators are concerned that each time the channel is blocked ship owners and charterers incur significant losses.

Sometimes the tides are only high enough for one hour out of the 24 hours in a day, and so ships have to take turns in an awkward manner to go through within that one-hour window, leading to huge time and revenue losses, which have gone unaddressed for years.

Sources tell BusinessDay that some shippers have had to engage ocean-going tugs to pull out vessels blocking the channel to enable other vessels/tankers cross the channel.

The Escravos channel, however, is an important tributary used by most seagoing crude vessels on the Delta ports area for the transportation of crude to off-take platforms on the high seas.

Chevron, a major US oil company, has its main Nigerian oil production facility at the mouth of the Escravos River with an over 400,000 barrel per day capacity terminal.

While it is not unusual to have narrow export channels on routes for oil exports, as can be seen in the case of Gibraltar, Suez Canal and the Straits of Hormuz, the problem with the Escravos channel is that it has been left to gather silts for years and as result ships must wait for high tide to be able to go through this channel.

To worsen the situation, some operators are not adhering to the regulations guiding vessels that pass through the channels.

For instance, the Suez Canal has a vessel called the Suez max, which is the maximum size that is allowed to pass through it.

To reduce the risk of collision, ships moving through the Strait of Hormuz follow a Traffic Separation Scheme (TSS): inbound ships use one lane, outbound ships another, each lane being two miles wide.

The Escravos Bar has restrictions against heavy-laden ships and large ships since its depth is only 6.2 meters, but these are frequently flouted.

The NPA awarded Dredging International Nigeria Limited the contract of dredging the channel in 2018 but the contract ran into troubled waters when rival bidders accused the company of being convicted by a law court in Switzerland hence unqualified, triggering an investigation by the NPA and a hearing by lawmakers, which have slowed the project.

Operators say the NPA should ensure the impasse is resolved and the channel is fully dredged as oil companies, ferry equipment offshore bringing petroleum products into their operating fields from offshore Lagos or Lome go through the channel.

Some oil companies including Shell, Eland, and local oil companies use it to export crude oil through barges to floating storage offloading (FSO) platforms, while others use bulk carriers to import corn/maize. Some dredging companies also operate through the channel, BusinessDay gathers.

The net effect is that Nigeria does not fully utilise the canal, and in turn gets limited value from it.

The NPA realised $45.2 million from the Delta ports in the first six months of 2019, but it could have doubled this revenue if the Escravos channel had been dredged, operators say.

“I want to appeal to the contractor handling the dredging of the Escravos/Warri River to expedite action so that the work can be completed in record time,” Simon Asite, vice president, Delta Shippers Association (DelSA), said in an appeal last month.

As a short-term measure, operators say the NPA should maintain stricter oversight on the issue of draft restrictions in order to avoid the incidence of the blockage of the channel by overloaded vessels that cause untold hardship and revenue losses to compliant operators.

Nigeria is ceding a competitive advantage by not fully operationalising its ports. Worse still, it is hurting the local economy.

The Warri Association of Chambers of Commerce, Industry, Mines and Agriculture (WACCIMA) recently urged exporters in Warri and its environs to patronise the Delta ports for seamless shipping of goods and services to boost the economic growth of the Niger Delta region.

Since the construction of the Escravos Bar in 1964, the breakwater has become the passage into the Escravos channel while the channel has in turn become the passageway into the Delta ports.

Over the years, the Escravos breakwater has been submerged and the channel silted.

This has resulted in its gradual abandonment by heavy tonnage merchant ships alongside the ports that it serves, namely the Warri, Koko and Sapele ports, which have gradually grown dormant. It was last dredged in 1997 but this should be done regularly.

Presently, only coastal tankers transporting refined petroleum products from offshore to the ports can navigate the shallow channel because of their relatively lighter deadweight tonnages; bigger deep-sea ocean-going vessels are unable to.

Large vessels are getting stuck across the Escravos channel, a tributary of the Niger River, which flows for 57 kilometres’, ending at the Bight of Benin off the Gulf of Guinea where it flows into the Atlantic Ocean, due to low water levels causing economic loss to the Federal Government and hurting shippers.

Four ocean-going vessels owned by Matrix Energy and other ship owners/charterers including MV Adebomi 3, MT Matrix Triumph, MT Matrix Asa, and MV Zola have run aground within the last three weeks, according to a shipper.

Since the maximum draft at the channel during high tide is 6.2 meters, large vessels wait for high tides to navigate across the channel.

Some heavily-laden vessels have run aground requiring heavy machinery to get them out. Until they are towed, they clog the channel, obstructing vessels that follow draft rules on vessel capacity, and reducing how much revenue the NPA can earn as charges.

Operators are concerned that each time the channel is blocked ship owners and charterers incur significant losses.

Sometimes, the tides are only high enough for one hour out of the 24 hours in a day, and so ships have to take turns in an awkward manner to go through, within that one-hour window leading to huge time and revenue losses that have gone unaddressed for years.

Sources tell BusinessDay that some shippers have had to engage ocean-going tugs to pull out vessels blocking the channel to enable other vessels/tankers cross the channel.

The Escravos channel, however, is an important tributary used by most seagoing crude vessels on the Delta ports area for the transportation of crude to off-take platforms on the high seas.

Chevron, a major US oil company, has its main Nigerian oil production facility at the mouth of the Escravos River with an over 400,000 barrel per day capacity terminal.

While it is not unusual to have narrow export channels on routes for oil exports, as can be seen in the case of Gibraltar, Suez Canal and the Straits of Hormuz, the problem with the Escravos channel is that it has been left to gather silts for years and as result, ships must wait for high tide to be able to go through this channel.

To worsen the situation, some operators are not adhering to the regulations guiding vessels that pass through the channels.

For instance, the Suez Canal has a vessel called the Suez max, which is the maximum size that is allowed to pass through it.

To reduce the risk of collision, ships moving through the Strait of Hormuz follow a Traffic Separation Scheme (TSS): inbound ships use one lane, outbound ships another, each lane being two miles wide.

The Escravos Bar has restrictions against heavy-laden ships and large ships since its depth is only 6.2 meters but these are frequently flouted.

The NPA awarded Dredging International Nigeria Limited the contract of dredging the channel in 2018, but the contract ran into troubled waters when rival bidders accused the company of being convicted by a law court in Switzerland hence unqualified, triggering an investigation by the NPA and a hearing by lawmakers that have slowed the project.

Operators say the NPA should ensure the impasse is resolved and the channel is fully dredged as oil companies, ferry equipment offshore that bring petroleum products into their operating fields from offshore Lagos or Lome go through the channel.

Some oil companies including Shell, Eland, and local oil firms use it to export crude oil through barges to floating storage offloading (FSO) platforms, while others use bulk carriers to import corn/maize. Some dredging companies also operate through the channel, BusinessDay gathers.

The net effect is that Nigeria does not fully utilise the canal and gets limited value from it.

The NPA realised $45.2 milLion from the Delta ports in the first six months of 2019, but it could have doubled this revenue if the Escravos channel had been dredged, operators say.

“I want to appeal to the contractor handling the dredging of the Escravos/Warri River to expedite action so that the work can be completed in record time,” Simon Asite, vice president, Delta Shippers Association (DelSA), said in an appeal last month.

As a short-term measure, operators say the NPA should maintain stricter oversight on the issue of draft restrictions in order to avoid the incidence of the blockage of the channel by overloaded vessels that cause untold hardship and revenue losses to compliant operators.

Nigeria is ceding a competitive advantage by not fully operationalising its ports. Worse, still, it is hurting the local economy.

The Warri Association of Chambers of Commerce, Industry, Mines and Agriculture (WACCIMA) recently urged exporters in Warri and its environs to patronise the Delta ports for seamless shipping of goods and services to boost the economic growth of the Niger Delta region.

Since the construction of the Escravos Bar in 1964, the breakwater has become the passage into the Escravos channel, while the channel has in turn become the passageway into the Delta ports.

Over the years, the Escravos breakwater has been submerged, and the channel silted.

This has resulted in its gradual abandonment by heavy tonnage merchant ships alongside the ports that it serves, namely the Warri, Koko and Sapele ports, which have gradually grown dormant.

It was last dredged in 1997, but this should be done regularly.

Presently, only coastal tankers transporting refined petroleum products from offshore to the ports can navigate the shallow channel because of their relatively lighter deadweight tonnes; bigger deep-sea ocean-going vessels are unable to.