Crude Oil Lifting: Nigeria Loses N2trn Annually

2011-08-19
THISDAY Newspaper- John Iwori

Not less than N2 trillion is lost annually by Nigeria due to the exclusive use of foreign owned ships to lift her crude oil to other countries, Chairman of Indigenous Shipowners Association of Nigeria (ISAN), Chief Isaac Jolapamo, has said.

It was also discovered that Nigeria is also losing huge sums of money through capital flight in the way and manner her crude oil is lifted to other countries over the years.

Jolapamo, who disclosed this in Warri Zone, Delta State, decried a situation where Nigeria sells her crude oil to foreign interests on free on board (FOB) rather than on cost, insurance and freight (CIF) basis; thereby causing the nation to lose several billions of naira annually.

Jolapamo, who is also the Managing Director and Chief Executive Officer of Morlap Group, which owns and operates ocean-going vessels and other river crafts, revealed that out of the over 600 ships working as oil rig platform support vessels in the upstream sector of the oil and gas industry, less than 50 are owned by Nigerians.

His words: “As at today, we can simply say that due to the poor implementation of the Cabotage Act 2003, Nigeria is losing about N2 trillion due to capital flight and the attendant job loss of 5 million. Where and when the Nigerian Content Act 2010 is effectively implemented, it will lead to more revenue generated and the creation of more jobs.

“It will interest you to know that Nigeria sells the crude oil at FOB with buyers nominating the vessels for the lifting. No Nigerian flagged vessel is involved in the operation. Of the over 600 vessels working as oilrig and platform support vessels in the upstream sector of the oil and gas industry, less than 50 are owned by Nigerians.

“The dichotomy in the duty payable by Nigerian ship owners and foreign ship owners is another cause for concern. While Nigerian ship owners pay import duty of over 15 per cent, their foreign counterparts pay only a 1 per cent bond for the same vessel.

“While Nigerian ship owners and their crew can hardly feed, illegally resident foreign vessels’ owners do all the jobs. Nigerian vessel owners are denied contracts and employments using various excuses such as age of vessel, classification society of the vessel, P & I and other neither here or there lame excuses.

This is in spite of the legislations, which prohibit the use of foreign vessels. Therefore the time to take our future into our hands is now,” Jolapamo added.

He stated that the idea of inaugurating ISAN in the Warri Zone was meant to decentralise the association and ensure that its membership was not restricted to Nigerian ship owners in Lagos alone.

He explained that the move, which is aimed at improving service delivery to its members and giving a boost to indigenous tonnage, would also ensure the growth of maritime activities in the littoral states in the country. He disclosed that other zones of the association would soon be inaugurated in Lagos, Port Harcourt and Calabar.

 

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