Indigenous ship owners may get approval to lift crude oil if…. . Dakuku champions new trade terms to boost shipping

Indigenous ship owners may get approval to lift crude oil if….

. Dakuku champions new trade terms to boost shipping

By Udeme Clement & Silas Onuoha

Stakeholders in the maritime sector are strategizing on how to get the desired change in trade terms from Free On Board ,FOB,  to Cost Insurance and Freight  ,CIF,  to enable them lift Nigeria crude oil, in order  to  boost indigenous capacity.

This initiative formed part of the discussion during the stakeholders’ engagement on changing Nigeria’s crude oil affreightment trade term from FOI to CIF,  organised by Nigerian National Petroleum Corporation ,NNPC, in collaboration with  Nigerian Maritime Administration and Safety ,NIMASA, in Abuja.

The Minister of State for Petroleum, Dr. Ibe Kachikwu, who spoke during the opening ceremony, accepted the idea. He noted that the issue on trade term is an aged long challenge, which has lingered too far and charged participants to come up with resounding resolutions.

The Director General of NIMASA, Dr. Dakuku Peterside who presented a paper titled,  ‘The Imperatives of Changing Nigeria’s Crude Oil Affreightment Trade Terms From FOB to CIF’ pointed out that the changing landscape of Nigeria’s maritime sector, its security architecture, capacity and other determinants necessitated the change now than ever before.

He said, “The CIF, if implemented will encourage indigenous fleet expansion, massive job creation for qualified Nigerian Seafarers, opportunities for  mandatory sea time experience for Nigerian cadets,  build expertise and competence in international shipping trade.

He went on, “Nigeria is one of the major exporters of crude oil and gas resources in the world, with average output of 1.92 million barrels of crude oil per day. So, this volume generates huge freight for carriers.  Regrettably, Indigenous shipping operators have insignificant share of the freight earned from the carriage of Nigeria’s crude compared to their foreign counterparts.

“OPEC nations such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allow indigenous operators to participate actively in shipment of crude oil.  So, with the right policies in place, Nigeria can build its own capacity, and one of this is the change of terms of trade for Nigeria’s benefit:”.

In the same vein, the Group Managing Director of NNPC, Dr. Maikanti Baru stated,  “The Corporation does not have any reason not to allow Nigerians lift crude oil.  There were conditions that made NNPC to opt for  FOB trade. The NNPC now sees benefits in CIF trade term, but processes must  be followed, which may include transition period before finally opting for the CIF trade term”.

Ship owners and major stakeholders who spoke at the engagement lauded the initiative.  Temisan Omatseye, ex- DG of NIMASA, who is also a Ship owner  pointed out a lot of benefits in CIF trade term, saying that it will eliminate crude theft, create jobs  to complement the diversification drive of government.