Nigerian Shipping Companies Can’t Participate In The Refining Of Crude Oil

Dr. Maikanta Baru, Director (NNPC), recently said in a speech that the Nigerian shipping companies do not have the capacity and ability to participate in the refining of the Nation’s crude oil.

The preference for NNPC’s foreign companies in shipping Nigeria’s crude oil to the international market has been a bone of contention between the state oil corporation and indigenous ship owners, who have severally criticized it for frittering away value that could have accrued to the national economy if their services were patronized.

Most Shipowners in Nigeria are not on good terms with the cooperation’s preference for its adopted Free on Board (FOB) trading terms in selling the Nation’s crude oil export rather than Cost, Insurance and Freight (CIF), with which would have given Sale of Nigeria’s crude oil. The FOB terms have been the guide over the Nigerian crude oil for more than 50 years. Under these FOB terms the buyer’s reserves their right to determine and nominate the ship that carries their cargo to the market. All the buyers of the Nigerians crude oil nominate foreign vessels to ship their products to the market.

Mr. Baru, who rendered a speech through NNPC’s Director of Marine Logistics, Ibrahim Lamin, at the 2018 World Maritime Day celebration in Lagos recently said “most of the country’s indigenous vessels were not fit for NNPC’s
job criteria even for petroleum products importation.

Disclosing that the corporation imports 35 cargoes of petroleum products per month, which translates to over 1,260,000 metric tons, the NNPC boss said, “There are no in-house vessels that can really accommodate our own type of fit-for-purpose work.

However, many shipowners at the event including former Minister of Interior, Captain Emmanuel Iheanacho, faulted the unfriendly disposition of NNPC towards Nigerian shipping companies.

Iheanacho, who is a Master Mariner and Chairman of Integrated Oil and Gas Limited, a none involvement of Nigerian shipping companies in NNPC’s shipments results in loss of value to the country.

He as well said, “We transport the oil to the wellhead and market it, and the person moves his or her ship and takes the oil from there where it was marketed.

All the value-added services that take on from that point, oil attachment to sheep, oil transport and lifting to the oil
refinery, finishing the refining process and bringing it back, attaching an identification of ownership to the face product, then bring it back to sell to us at a bumper profit – we make inestimably lose all the time.

“All we are saying, in essence, is that we detest selling anything on FOB so that we add value to it. So, when talking about oil, it is not only the transportation we talk about. The refining process is also involved. considering the job creation and employment in maritime processes, we are losing quite a lot.”

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