Nigeria’s ship registry is not an open one and for this reason, experts say that the practice is hampering rapid and strategic development of the oil industry and denying the country of the needed economic boost.
In the memorandum which was submitted last week to the House of Representatives on the on the ongoing debate and public hearing on the Petroleum Industry Bill (PIB), it is estimated that about 500,000 are involved in crude oil lifting business globally. Each of them will require between $1,500 and $3,000 to register in a flag of convenience country.
The duo lamented that Nigeria is not befitting maximally form the petroleum sector because it has failed to join the FOC states.
The memorandum co-authored by two oil firms – Messrs MO Energy Limited and Petro Star Nigeria Limited – revealed that the Federal Government could generate a minimum of $75 million annually from registration of flags alone which are then hoisted on the ocean-going vessels.
“Other areas of value added activities include monthly supply of about 3,000 litres of prima and 5,000 litres of marine finishing coat per vessel on board monthly, paints, manpower for each vessel, under the International Maritime Organisation regulation, to which flag states must ensure compliance. This would also generate millions of dollars and high volume of jobs for Nigeria and her citizens.
He said countries such as United States, Britain, Iran and Iraq are good examples where vessel-flagging opportunities have paid off.
In order to actualise this area of business, the group said, the Federal Government should ensure through policy mechanism or legislation, that cargo owners give preference to Nigerian flagged vessels to load cargo abroad.
Okoli said by adopting the policy, government would be encouraging ship owners to take up Nigerian flags, reduce demurrage and discourage foreign domination of the crude oil lifting business