BusinessDay
Nigeria's leading finance and market intelligence news report.

Hope for Nigerian-owned ships as NNPC changes bidding terms for crude oil lifting

The Nigerian National Petroleum Corporation (NNPC) has in line with the provisions of the Nigerian Oil and Gas Industry Content Act (NOGICA), changed its bidding terms for 2021 – 2022 Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP), to favour Nigerian ship owners, BusinessDay has learnt.

In its recent DSDP requirement, NNPC has made it compulsory that to load or bring in any crude oil or petroleum cargo that is for Nigeria, the contractor must engage a Nigerian-owned shipping company.

Given the development, Nigerian vessels that have been struggling to participate in its multi-billion dollars shipping business especially the crude oil lifting and lightering of petroleum products, which have been largely dominated by foreign owned vessels, would now have the opportunity to compete favourably.

Aminu Umar, managing director of Sea Transport Ltd, who made this disclosure during a recent virtual conversation, attributed this to efforts made by the National Fleet Implementation Committee (NFIC) in pushing for involvement of Nigerian-owned vessels in the nation’s crude oil lifting.

“This is a great achievement and good step in the right direction. We hope to start seeing the benefits of this new clause on indigenous ship owners in the next three to four months, particularly in terms of access to business for Nigerian-owned vessels. We are very hopeful because it is an exciting development for Nigerian ship owners,” Umar said.

Umar, who noted that Nigeria has been missing out in area of human capital development, expressed optimism that the new development will create opportunity for Nigeria to create jobs and generate much capital inflow through seafaring that is presently dominated by Asian countries like Philippine and India.

To create opportunities for Nigerian ship owners, part of the 2021-2022 DSDP requirements, which was sighted by BusinessDay, insists that bidders must utilise Nigerian shipping companies/marine vessel vendors that are categorised A/AA in the latest Nigerian Content Development and Monitoring Board (NCDMB) NOGIC Joint Qualification System (JQS) Marine vessel Categorisation report.

“All vendors in tender who are not categorised A/AA in the NCDMB Marine vessel report shall submit a Memorandum of Association (MOA) with Nigerian shipping companies/marine vessel vendors categorised A/AA in the NCDMB NOGIC Joint Qualification System (JQS) Marine Vessel Categorisation report in compliance with giving first consideration to Nigerian goods and services in this contract,” NNPC stated.

The Free on Board (FoB) trade policy for Nigerian crude oil as well as other wet cargoes has made it near impossible for Nigerians to invest in ship acquisition to participate in its shipping.

Marvin Abe, general manager, Apapa Bulk Terminal Ltd, blamed NNPC for the failure to change crude oil trading policy from FoB to Cost, Insurance and Freight (CIS) to encourage Nigerian ship owners to become more involved in crude oil lifting business.

He said this has been a major setback to shipping development in Nigeria.

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