Oil Theft: Nigerian Ship Owners Back Govt Over Ban On 113 Oil Tankers
Capt. Olaniyi Labinjo is the president of the Nigerian Ship Owners Association (NISA). In this interview with IKECHUKWU ONYEWUCHI, he urges government to leverage on the potential job opportunities in the Maritime industry, especially in the wake of the ban on 113 vessel from Nigerian waters.
What is your appraisal of shipping business since the change in government? NOT much has changed. The government has just been brought in, but the agitation by shippers still remains the same. It is a transition period.
There has not been, over the years, a right implementation of the Coastal and Inland Shipping (Cabotage) Act and this has always hampered the development of the local industry.
What we have been advocating in the last 13 years, since 2003, is the indigenization of shipping business in Nigeria, where we would see Nigerians take center stage in shipping in Nigeria.
Nigerians do not own majority of the ships doing business in the country. But there has always been the question of local capacity I don’t think there is such an issue.
That is a lie, one that comes from people who want to make us remain in bondage and subservient to them. I don’t believe so. We have Nigerians, who have been seafarers since the 50s, people who even owned ships.
What kind of capacity are we talking about? People who raise the issue of capacity are those who want to keep ripping Nigeria off. We have the required capacity to oversee the industry competently.
The government recently barred 113 ships from Nigerian waters, in a new move to sanitise the oil sector; what do you think this portends for shipping, the maritime industry and the country’s reputation? I am not an oil importer, but from the look of things, the move is the best thing for the country.
Ideally, if one wants to buy oil, he only needs to order for the oil and pay for maritime transportation. But that doesn’t happen in Nigeria. In fact, the reverse is the case.
For instance, there are three parties invovled with oil trade. There is the buyer, the seller and the vessels. A buyer is supposed to contact his buyer to make a purchase.
After this, he contracts a vessel to come down to Nigeria to lift the oil. The vessel comes from any part of the world. But that shouldn’t be the case. If a Nigerian wants to buy phones, he would have to call his business partners, in say, China and make an order, which would include the actual purchase and shipping cost to Nigeria.
But, for oil, they just pay us for the oil and make their own arrangement for transportaton, which actually constitute capital flight because if Nigerians handle the shipping, the revenue would remain in the country.
The ban by Nigerian National Petroleum Corporation (NNPC) doesn’t really matter; it is best for the country. If one understands the maritime sector, it would be easy to see reasons with government.
In fact, government has no direct dealing with the tankers. They only come to pick up oil for their clients. We are better off without them. Government doesn’t really need to give an explanation.
There is absolutely no need. It says it is dissatified with their operations, which is good enough. Oil traders generally belittle Nigerian ships. Instead of them to buy our oil and use our ships to export, they would bring in their own.
Ships come from Amsterdam and berth in offshore Lagos and require smaller ships to get the oil into the country. There is a huge opportunity for Nigerian ships to do this job, but this never happens.
Foreign ships are contracted to do this job. The new government came in with the slogan of change and it is apparent that it is being reflected in the recent decision.
It is now apparent that it is no longer business as usual. People have to give account, and government has discovered that the banned tankers are in shaddy deals with government officials. It is only logical that something is done.
Given the impact of trade in maritime, how then can government leverage on this opportunity? If our refineries start working, we won’t need to import again.
How are we going to carry the fuel from the refineries to the tank farms? We still need ships. We need about 1.8 billion liters of oil in Nigeria. If our refineries were working, we would still need ships to transport fuel from the site of production to the refineries.
Expatriates from Singapore, who deploy smaller vessels to transport fuel, would have carried out the jobs ordinary. That is what is known as lightrage. Shell, ExxonMobile and Agip produce oil and would need ships to transfer their product.
They have realised that between 2015 and 2020, we would need about 900 ships. In 2010, they said, given the job they have mapped out, they needed 912 ships to support their operations. With that, they have about 1800.
If they had none before, within ten years, they said they would need 1800 ships. If it were a technocrat that is heading NIMASA, what would he do? He would make sure that out of the number, he would bring in a shipyard to Nigeria to come and build the ships here. For 1800 in 10 years, that comes to an average of 200 a year.
A shipyard cannot build about 200 ships a year, because it would take about one and a half year to build just one ship. So they would need more. In addition, if litrage generates about 500,000 jobs, the shipyard would be generating about 700,000.
If we have all these things in place, we would be carrying our crude ourselves and then issue of the 113 ships would not matter to us. When they bring out the oil, Nigerians would be the ones to take the oil to whoever needs it anywhere in the world using another set of 113 vessels.
If Nigeria does all these, would we be talking about unemployment for our teeming youths? Would we be talking about economic downturn, capital flight? American ships don’t go out; that is the mistake people make.
There is the buyer, the seller and the vessels. A buyer is supposed to contact his buyer to make a purchase. After this, he contracts a vessel to come down to Nigeria to lift the oil. The vessel comes from any part of the world. But that shouldn’t be the case. If a Nigerian wants to buy phones, he would have to call his business partners, in say, China and make an order, which would include the actual purchase and shipping cost to Nigeria. But, for oil, they just pay us for the oil and make their own arrangement for transportaton, which actually constitute capital flight because if Nigerians handle the shipping, the revenue would remain in the country
There is no ship in the port here from America. It is because they have more jobs in their local economy. Imagine if we were busy with our 5000 or 10000 ships, attending to our offshore and another 1000 or 2000 attending to, let’s call it imports from refineries, can you imagine if there was free flow in all of the ports, ships are coming in and discharging and Nigerians are working, what would happen. Our GDP would grow.
Maritime was not included in the last rebasing of the economy; it was completely missing. If we were able to put the $5.4bn to use by engaging Nigerians in the maritime business, how would we fare? According to the NNPC, Nigeria spent N732.35bn between 2012 and 2015 to convey what is meant for refining in Nigeria to the refineries.
They call it maritime transportation, which simply means conveying the crude from the field to the refineries because the pipelines have been destroyed and they have to resort to ships.
Was this money paid to Nigerians? No, it is not. In one year, they paid N200bn. And this would have been copiously deployed back into the economy if we had local shippers handling them. There is monster money being paid to outsiders. Everything goes to foreigners. If we were able to trap it back into our GDP, would we not have it higher?
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