ABDUL-KADIR AHMED, managing director/CEO of the NLNG Ship Management Ltd (NSML), the maritime services subsidiary of NLNG which is responsible for the technical management and manning of BGT’s fleet. In this interview with AMAKA ANAGOR-EWUZIE, he spoke on how NSML is enabling manpower development in Nigeria’s maritime sector. He also spoke on the reforms that would position Nigerian trained seafarers, ship registry, and ship-owners to compete favourably in the global shipping sector. Excerpts:
As a major player in the global and Nigerian shipping business, what has been the role of NSML in manpower development for the maritime sector?
The Nigeria LNG (NLNG) is a pioneer in the gas and LNG business. And shipping is a critical aspect of the LNG value chain. NLNG started with the ownership of vessels before the decision to even build the plant was taken. The company has charted 23 vessels to enable the delivery of cargo all over the world. There was a requirement for shipping officers and crews that would man those vessels, which was the essence of creating NSML some 13 years ago to provide manpower to operate those vessels.
The trajectory of the business has been about ensuring that we have qualified Nigerian seafarers to operate LNG vessels. NSML as an entity is the technical manager of some of those vessels and ensuring there is qualified manpower onboard, maintaining those vessels, organising, drydocking and all the elements that go into ensuring those vessels move efficiently and effectively.
One of the things NLNG, as a company did, was sponsoring the training of officers and those who went to Maritime Academy of Nigeria (MAN) Oron were sent out to train. With frequent training, we achieved a sufficient number that manned those vessels, but we continued to train seafarers in conjunction with NIMASA under the Seafarers Continuous Development Programme, which is about ensuring that NIMASA sponsored cadets have spaces onboard our vessels to finalise their training before getting the Certificate of Competency (CoC).
For us, it is about ensuring that Nigeria has a pool of certified seafarers who can operate any vessel globally. So far, over 107 cadets have gone through this programme. Currently, we have 50 on our vessels already and have employed over 44.
For us, it is about ensuring that Nigeria has a pool of certified seafarers who can operate any vessel globally. So far, over 107 cadets have gone through this programme
As a service provider, we should enable our customers to compete effectively. But if we find ourselves adding more to their costs, it is only a matter of time before they say no, you are not an enabler
Tell us about the ‘Nigerianisation’ policy of the NSML, and where you are on the implementation?
The policy to us is critical. We are a Nigerian company and for that reason, in line with our vision of supporting the growth and development of the Nigerian maritime sector, we cannot be a Nigerian company with a pool of seafarers that are predominantly foreign.
So, we took a particular decision of ensuring that we achieve in the first instance 100 percent capacity to manage and run our vessels. However, because the shipping business is international, we do not want to over localise ourselves. It was important that we have cross-fertilization of cultural mix. So, we always have a mixture of crews from India, the Philippines, Ukraine and Russia, and Croatia among others.
The target for our Nigerianisation is 85 percent by the end of 2022. As of the end of 2021, we hit 84.6 percent, and we will meet 85 percent. When it comes to the ratings, they are significantly Nigerians but we have a few Filipinos for the mixture we talked about. Officers are predominantly Nigerians but at the higher level, we have Croatians, Malaysians, and Indians, but predominantly, they are Nigerians and we expect that by the end of 2022, we will meet our 85 percent target.
The purpose of NSML was to find a way of domiciling the skill set required for running and operating LNG vessels, locally.
NSML is a Nigerian company, owned by us, run by us, and managed by us. There is that tendency to put in, over, and above. Beyond providing crews for NSML managed vessels, we want to provide opportunities for Nigerian seafarers to be gainfully employed internationally. We should be in the business of exporting seafarers. India and the Philippines, for instance, make a lot of money from the provision of crew onboard global vessels. We have the population, the skill sets, and the drive as well as the ingenuity of the Nigerian spirit.
What do you think are the reasons why CoCs issued in Nigeria are not widely accepted? And what do you think can be done to make that happen?
There is a lot of work that needs to be done. The industry and the standards are international. A maritime academy issuing a CoC that is certified by a maritime body, which is NIMASA, for another body to feel comfortable that the quality of your training, as well as the quality of your certification process, is up to scratch, they need to at least do their verification audits. I think this is where we have not gotten it.
We in NSML have also done some audits of the MAN Oron facility some years back, identified gaps, and we believe those gaps are being closed. In terms of quality of facility and standards of training, I think they are moving in the right direction. What is left is about ensuring you get other agencies to be able to come in, and do the verification audit to be sure that what you said it is, is exactly that.
From the NIMASA side, it is about auditing the process and the system of verification because NIMASA is a certifying body. So, there is a multiple verification audit for both the academy and the regulator.
It is easier for us as an operator if Nigerian CoCs are acceptable internationally. If they are then, our seafarers do not need to fly to South Africa, the UK, and now Ghana has just revalidated their CoCs. I believe that we are on the right track, but it requires everybody within the industry both private and public sector participants working together with a primary purpose, which is to ensure that those CoCs are accepted internationally.
What are you proposing as the best way to reform the Nigerian ship registry and make it competitive?
It goes back to acceptance. As a ship register, will others be satisfied with your processes of inspection? That is the essence of it. When ships are registered under a flag, the registry ensures those ships are run, maintained, and operated in accordance with standards.
For others to believe that the regulator must have put in place the capacity, which comprises not just the physical element of being able to do this but also the system, the process, and all that goes into ensuring that it will be done effectively, in a manner that meets international standards.
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Secondly, there are international regulations and standards that need to be domiciled locally. For those international laws to apply in Nigeria, they need to be Nigerian laws. Things like this need to happen but it’s a work in progress.
There is a need to declare Nigeria a maritime nation, which goes beyond the declaration, but at least the declaration recognises that is an area that we can play in. When you declare it is about putting your house in order. There is a committee that has been set up by NIMASA to discuss that, and identify the things that need to be done. Those things have been identified and a lot of actions are being taken. It may look slow, but again, whatever is good, will take a bit of time to perfect.
Insecurity has been a major challenge to shipping in Nigeria such that the global shipping community sees Nigeria as a hotspot for pirate attacks. How has this been affecting the movement of your products?
First, let me say that the Deep Blue Project of NIMASA has gone a long way in addressing that. Are we there yet? No, but it is a step in the right direction. Piracy is a major risk to shipping. The impacts are twofold. The first one is what you see including crews at risk, vessels hijacked, and those physical things that happen when there is an attack. People killed, crews kidnapped, cargo lost, ransom paid. All of those physical things are the things that are obvious. What a lot of people do not realise is behind all of that are the things that people do not see, and the impact on the competitiveness of players operating in that environment.
In NSML, the insurance is going up. We pay the crew high-risk area allowances, install all sorts of protective equipment on the vessels, and get escort boats to escort our vessels in and out. All of these cost money. The insurance premiums are high even double what obtains in other locations. Now, people do not see that. It adds significantly to the cost of shipping in these areas.
One of the risks is that if we are not competitive, then this business is not sustainable. Why? It is because every person producing, selling, and delivering LNG wants to be able to do that competitively, and the industry has evolved into a competitive one. People look at where to get the cargo at the cheapest price.
As a service provider, we should enable our customers to compete effectively. But if we find ourselves adding more to their costs, it is only a matter of time before they say no, you are not an enabler. Those are the impacts the piracy issue in the Gulf of Guinea adds to the operation of the business.
The launch of the Deep Blue Project was a step in the right direction but we are looking forward to the extension of it to ensure it gets to a stage where piracy even if it does not become a thing of the past, becomes at a level that is manageable.
What does the Russia-Ukraine crisis portend for the global shipping business, particularly the Nigerian maritime sector?
The Ukraine-Russia conflict has the actual and the potential impacts. The actual impact of Ukraine-Russia conflict today is that a lot of seafarers actually come from Russia and Ukraine, and we have them on our fleet.
So, imagine those on board and their families are at risk. Imagine those who need to go home, but the replacements cannot travel. All of those have impacted significantly. Of course, we are beginning to see the impact in terms of availability. Normally, there is an already structural deficiency of qualified seafarers within the industry. But, the longer the Ukraine-Russia crisis goes on, we will also see an added level because a large chunk of qualified seafarers may not be available.
In terms of potential, the crisis at the moment is confined within a particular location but if it expands to become a wider European whatever, then the missiles and the bomb are all guided by the global positioning systems. Normally, when these kinds of crisis escalate, there is a potential that those systems will be jammed, and vessels movement and locations are all guided by this. So, there is a potential as well.
It is something that we at NSML and several other entities within the ship management community are keeping a very close eye on. The one thing about the shipping business is even though we compete against one another, we also do realise that we have to collaborate and cooperate. There are certain aspects of operation, safety, and security that affect all of us. That is why, it does not matter where a vessel is going and the deadline it has, when another vessel is distressed, you turn and provide support. The business is lonely enough that you have to work together.
Apart from the impact in terms of crew supplies, prices of gas have multiplied 10 times in Europe. Oil prices are above $100 per barrel. It is both an opportunity and of course, in our own case, it is also a cost. Diesel, for example, people do not realise until now that Russia supplies over 40 percent of the diesel in Europe.
From our point of view, it is really the human impact. We had to reach out to some of our Ukrainian workers because it cannot be easy when you are at sea and your family is at risk, and you are supposed to be 100 percent at alert. For those who want to go home, we provided for them to go and for those who want to move their families, we also provided.
The level of involvement of Nigerian ship owners in Cabotage trade and crude oil lifting has remained low despite the existence of Cabotage and Local Content Acts. How worried are you about this? And what model do you think can best work for Nigeria in terms of shipping development?
We have the Cabotage law that is being implemented and monitored effectively by NIMASA. Cabotage Law is really around ensuring that Nigerians are engaged in the ownership, and operations of vessels undertaking coastal trade. I would like to think that is the case today.
We manage the LPG Alfred Temile, which is a vessel chartered by Nigeria LNG to deliver LPG into the domestic market. That vessel is owned by Nigerian company. It is managed by Nigerian company and manned 100 percent by Nigerians. That is a testament to say it works, and I am sure you will find other activities as well.
Beyond passing the law is socialising the law, enforcing and practicalising the law. For me, I believe Cabotage is actually being done. We are testament to that. Though, there might be issues here or there.
On crude oil lifting, this is where we are moving out of the realm of coastal trade to the realm of international trade. Nigerian companies can do it but you also need to understand, when we go back to the issues of flag, CoCs, and all of those things that go beyond ownership of the crude and the vessel. These vessels will pass through international waters and will call at ports and destinations under the jurisdiction of various maritime agencies. There has to be an element of comfort and acceptance that yes, these vessels bringing these cargoes will not destroy our facility.
We are on track. There are a lot of activities around CoCs, registry, Cabotage, and local content. I do believe we are working. I know that the Nigerian National Petroleum Corporation (NNPC) is at the forefront also in terms of ensuring that we build that capacity, and create that business because it is beneficial for the country.
Beyond, it is also important to recognise what I said about international trade. It is global. It is international. It is competitive. Nobody is going to give you something on a platter. It does not matter where the vessel is from. The cargo owner is only concerned that the vessel is good, the crew is competent and the rates are competitive.
Are there challenges affecting your business that you will want government to solve?
There are challenges that are pertaining to the industry. Some may be government, and some may be individual. I do not want to focus overly on government. Government has a role to play but we equally have a role to play.
A critical challenge for a company that operates in an LNG environment boils down to the challenge of competitiveness and sustainability. It entails being able to get equipment, the resources, and seafarers competitively. In terms of seafarers, is being able to develop, attract and retain the best not only in Nigeria but globally because I compete internationally.
It is about creating an environment that ensures competitiveness, and Nigeria is a work in progress.
