NNPC, NIMASA, NCDMB brainstorm on crude lifting by Nigerians

Contracts for lifting Nigerian crude oil will begin to yield benefits for the Nigerian economy going by the renewed commitment by the Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian National Petroleum Corporation (NNPC), the Nigerian Maritime Administration and Safety Agency (NIMASA) and other stakeholders in the oil and gas industry.

The Board estimated in 2013 that the Nigerian economy lost over $100 billon in five decades by allowing its crude oil to be carried exclusively by foreign owned tankers.

But rising from a meeting entitled “Crude Oil Off-takers Nigerian Content Deliverables” convened by the Board in Lagos, the agencies and other stakeholders pledged to grow the quantum of Nigerian content in the lifting of Nigerian crude oil by working with Nigerian shipping stakeholders to develop in-country assets capacity that meets international standards.

They also agreed to ensure that companies that have invested in ownership of crude oil lifting vessels are given first consideration in line with the provisions of the Nigerian Oil Industry Content Development (NOGICD) Act.

NCDMB, NNPC and NIMASA also committed to explore the possibility of a joint fund as part of waiver mechanism, which can be used to purchase or finance the building of Nigerian owned crude oil lifting tankers.

Another decision taken at the workshop was to properly define what constitutes “spend” in crude oil lifting contracts for the purpose of complying with the target of 90 per cent industry spend within the Nigerian economy set for Very Large Crude Carriers (VLCCs) by the NOGICD Act.

The Acting Executive Secretary of the NCDMB, Patrick Daziba Obah described crude oil lifting and marketing as a major activity in the oil and gas value chain, despite the fact that Very Large Crude Carriers (VLCCs) were highly capital intensive to acquire. He however, stressed that Nigeria will remain a major oil producer and not a major oil business value adding nation if the citizens do not own VLCCs.

While identifying opportunities for growing Nigerian Content in crude lifting, Obah noted that VLCCs require manning by certified crew while crude oil lifting attracts opportunities for financial, insurance, inspection and other services. Other spend points in the value chain include the use of lubes and maintenance of VLCCs.

Obah, who was represented by the Director, Monitoring and Evaluation, Tunde Adelana explained that the Board introduced Nigerian Content requirements for crude oil lifting in 2013 so as to maximise the value retention opportunities.

According to him, Nigerian Content requirements for crude lifting contracts required that tankers/vessels that are selected to lift Nigerian crude would grow Nigerian Equity Ownership, create sea time attachment for five Nigerian cadets and create employment and training opportunities and utilisation of Nigerian service providers such as financial, insurance, legal and inspection services.

He underscored the collaboration of NNPC in introducing the Nigerian Content requirements for crude lifting, assuring that the Board would intensify its monitoring of companies that secured Crude Oil Term Lifting Contracts to ensure their compliance with the requirements. 

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