Crude affreightment: NIMASA, NNPC bids to change terms of trade

Adebayo Obajemu

In its effort to effect a change in the nation’s Terms of Trade with regards to crude oil affreightment, the Nigerian Maritime Administration and Safety Agency, NIMASA in partnership with the Nigerian National Petroleum Corporation, NNPC, have started moves to effect a change from Free On Board, FOB to Cost Insurance and Freight, CIF.

Dr Bashir Jamoh, Director-General of NIMASA, at a meeting with NNPC officials in Lagos said that under FOB trade terms, Nigeria has no measure of control over the delivery of its crude oil as regards carriage, insurance, and other ancillary services.

Jamoh also said that under the CIF arrangement, the country maintains ample control over the distribution of its oil, which can be leveraged to enhance the competitive advantage of indigenous operators.

Jamoh who received a delegation from the NNPC commended the corporation’s grant of the Agency’s requests and generous pledge of cooperation during his recent visit to the corporation and prayed for the continuation of such mutual understanding.

The agency boss disclosed that the NIMASA was also working towards the implementation of a National Maritime Security Strategy to improve security in Nigerian waters and reduce the cost of shipping.

He said: “Since 2018, NIMASA has championed moves for a change in the terms of trade with regard to transportation of Nigerian crude oil, from FOB to CIF to ensure greater benefits for the country from its oil resources,” the Director-General stated. “A technical committee involving NIMASA, NNPC, and other stakeholders would be set up to develop a template for the desired change, with workable timelines.

“Seventy per cent of the Agency’s revenue comes through the sale of crude. Thus, cooperation between NNPC and NNPC cannot be over-emphasised.”

“The Maritime Intelligence Unit recently established by the Agency is part of efforts to ensure a proactive approach to security in our waters. The focus is to try to nip maritime attacks in the bud by tracking the criminals from the pre-planning and planning stages.

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“The ultimate aim is to develop a National Maritime Security Strategy that would help to minimise the cost of insecurity, which NNPC bears on behalf of the country, in the shipment of Nigerian crude.

“We appreciate the NNPC for accommodating NIMASA in its processes. We do not delay vessels in the search for information on them because of the confidence we have in NNPC’s capacity to readily supply such information.”

The Director-General appealed for more local content in the transportation of the country’s crude in line with the Cabotage regime.

Similarly, newly appointed Group General Manager, Crude Oil Marketing Division, NNPC, Sir Billy Okoye, said that NIMASA was a “critical stakeholder in the business of crude oil sale.”

Okoye explained that his goal was to get the two agencies of government interfacing more closely with each other to resolve challenges and ensure seamless movement of crude and petroleum products in the country