The Nigerian National Petroleum Corporation (NNPC) and the Nigerian Maritime Administration and Safety (NIMASA) are set to allow indigenous ship owners to lift crude oil.
This will lead to a change in trade terms from Free On Board (FOB) to Cost Insurance and Freight (CIF).
The deal was sealed yesterday at the NNPC Towers in Abuja.
Minister of State for Petroleum Dr. Ibe Kachikwu, who declared the stakeholders meeting open, welcomed the development, urged participants to come out with resolutions that would be of national benefit.
NIMASA Director-General Dr. Dakuku Peterside, who presented a paper titled โThe Imperatives of Changing Nigeriaโs Crude Oil Affreightment Trade Terms From FOB to CIFโ, said the changing landscape of Nigeriaโs maritime sector necessitated the adoption of CIF.
Peterside said: โThe CIF, if implemented, will encourage indigenous fleet expansion, lead to massive job creation for qualified Nigerian Seafarers, create opportunities for mandatory sea time experience for Nigerian cadets and build expertise and competence in international shipping trade.
โNigeria is one of the major exporters of oil and gas resource in the world, and she averages an 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 Nigeriaโs crude compared to foreign counterpartsโ.
He stated that OPEC nations such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allow indigenous operators to participate actively in shipment of the crude oil, stating that with the right policies in place Nigeria can build its own capacity and one of this is the change of terms of trade for Nigeriaโs benefit.
NNPC Group Managing Director Dr. Maikanti Baru said the corporation had no reason not to allow Nigerians lift crude. He added that the NNPC was aware of the benefits in the CIF trade term but processes have to be followed which may include transition period before finally opting for the CIF trade term.
Shipowners and major stakeholders, who spoke at the engagement, lauded the initiative.
A former DG of NIMASA, Temisan Omatseye, who is also a ship owner, said the CIF trade term would eliminate crude theft, create employment and compliment the diversification drive of the Federal Government.
The President of the Ship Owners Association of Nigeria (SOAN) and Managing Director of Starz Marine Group, Greg Ogbeifun, said what was needed to make the CIF initiative to grow the Nigerian shipping industry and the economy was government support.
