Senate Angry over Loss of $120m Annually on Crude Oil Shipment, Asks NNPC to Patronise Indigneous Firms
By Onyinye Apeh
The Senate Tuesday expressed concerns that Nigerians were not part of the crude oil affreightment in which the nation now loses $120 million annually to foreign firms.
Following this revelation, the Senate directed the Nigerian National Petroleum Corporation (NNPC) to do everything to boost the capacities of indigenous firms and allow them to be part of the crude oil affreightment.
The Senate was briefed about this development during the investigative hearing of the Senate Committee on Local Contents involving the NNPC management and Ship Owners Association of Nigeria.
The Senate Committee Chairman, Senator Teslim Folarin said the considering the huge revenue loss , the NNPC should allow local shipowners to be part of petroleum products carriage.
He said, “It is very important we patronise indigenous shipping. The whole essence of this investigative hearing is not to trade blame. We understand that they don’t have enough vessels; they don’t have capacity and capacity cannot come from heaven.
“The GMD of NNPC, Malam Mele Kyari, who is here with us, has the capacity to help build capacity. It is very important that we patronise indigenous shipping companies.”
Senator Solomon Adeola, Chairman. Senate Committee on Finance, during the hearing also said it was wrong for the NNPC to fail to carry indigenous operators along in crude oil transportation.
Lamenting that this was a big ecoomic loss to the country, Adeola said it was wrong to say that Nigerians do not have the the required vessels for the transportation.
The NNPC GMD, Kyari had earlier told the Senate that there was no indigenous vessels to patronise however assured that he would do his best to assist the local firms build capacity.
“I am going to work to support these companies. We will engage our partners” he said.
The President of Ship Owners Association of Nigeria (SOAN), Dr. Mkgeorge Onyung, in his presentation before the Senate told the Committee that the local content law in terms of shipment of petroleum products in the downstream sector of the oil industry is being breached to favour foreign firms.
Onyung said this was causing capital flights.
He said, “In the 2019/2020 DSDP disposition, a contract valued at 9 billion USD was undertaken. Freight expenditure on Import Tankers was approximately 60 million USD monthly or 720 million USD annually
“Between July and August 2020, 320 foreign tankers arrived Lagos offshore with imported PMS.
“This 100% foreign-dominated supply chain activity creates no in-country value for the Nigerian maritime industry with no multiplier-effect on other sectors of the economy. Foreign fleet is chartered by NIDAS Marine, NNPC subsidiary, via foreign shipbrokers namely Clarksons, E.A. Gibson, Brassington, Braemer and Affinity ”
The Senate Tuesday expressed concerns that Nigerians were not part of the crude oil affreightment in which the nation now loses $120 million annually to foreign firms.
Following this revelation, the Senate directed the Nigerian National Petroleum Corporation (NNPC) to do everything to boost the capacities of indigenous firms and allow them to be part of the crude oil affreightment.
The Senate was briefed about this development during the investigative hearing of the Senate Committee on Local Contents involving the NNPC management and Ship Owners Association of Nigeria.
The Senate Committee Chairman, Senator Teslim Folarin said the considering the huge revenue loss , the NNPC should allow local shipowners to be part of petroleum products carriage.
He said, “It is very important we patronise indigenous shipping. The whole essence of this investigative hearing is not to trade blame. We understand that they don’t have enough vessels; they don’t have capacity and capacity cannot come from heaven.
“The GMD of NNPC, Malam Mele Kyari, who is here with us, has the capacity to help build capacity. It is very important that we patronise indigenous shipping companies.”
Senator Solomon Adeola, Chairman. Senate Committee on Finance, during the hearing also said it was wrong for the NNPC to fail to carry indigenous operators along in crude oil transportation.
Lamenting that this was a big ecoomic loss to the country, Adeola said it was wrong to say that Nigerians do not have the the required vessels for the transportation.
The NNPC GMD, Kyari had earlier told the Senate that there was no indigenous vessels to patronise however assured that he would do his best to assist the local firms build capacity.
“I am going to work to support these companies. We will engage our partners” he said.
The President of Ship Owners Association of Nigeria (SOAN), Dr. Mkgeorge Onyung, in his presentation before the Senate told the Committee that the local content law in terms of shipment of petroleum products in the downstream sector of the oil industry is being breached to favour foreign firms.
Onyung said this was causing capital flights.
He said, “In the 2019/2020 DSDP disposition, a contract valued at 9 billion USD was undertaken. Freight expenditure on Import Tankers was approximately 60 million USD monthly or 720 million USD annually
“Between July and August 2020, 320 foreign tankers arrived Lagos offshore with imported PMS.
“This 100% foreign-dominated supply chain activity creates no in-country value for the Nigerian maritime industry with no multiplier-effect on other sectors of the economy. Foreign fleet is chartered by NIDAS Marine, NNPC subsidiary, via foreign shipbrokers namely Clarksons, E.A. Gibson, Brassington, Braemer and Affinity ”
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