By Joshua Yousouph
Nigerian ship owners have expressed concerns over the lack of indigenes in lifting crude oil for the Nigerian National Petroleum Corporation Limited (NNPCL). Despite this setback, they anticipate a significant surge in opportunities with the impending roll-out of premium motor spirit (PMS) by Dangote Refinery in June 2024.
Recall that the Chairman of the Dangote Group, Aliko Dangote, speaking as a panelist at the Africa CEO Forum Annual Summit in Kigali, Rwanda said that with the plan the Dangote Refinery has in place, Nigeria will not need to import premium motor spirit as from by June 2024.
Dangote said that the refinery, which has already started supplying diesel and aviation fuel in Nigeria, has the capacity to meet the diesel and petrol needs of West Africa and the aviation fuel demand of the entire African continent.
“Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre,” Dangote had said.
Checks by Shipping Position Daily revealed that the Lagos-based $20 billion refinery has issued a term tender to buy two million barrels per month of United States (US) West Texas Intermediate Midland crude for a year starting in July.
This amounts to 24 million barrels of West Texas Intermediate Midland crude in one year. It is set to become the largest refinery in Africa once it is fully operational.
But, speaking with our correspondent last week, President of the Nigerian Shipowners Association (NISA), Otunba Sola Adewumi welcomed the announcement by Dangote Group regarding the imminent production of gasoline while expressing optimism that the refinery’s commitment to flooding the market with gasoline will have positive implications for Nigerian ship owners.
Adewumi pointed out that increased local production would reduce the need for importing petroleum products from countries like America, where Nigerian ship owners are often left out in lifting the Crude. He highlighted the economic benefits that could arise if the product becomes more affordable locally.
According to the NISA President, the prospect of reduced importation and increased local production is expected to create new opportunities for Nigerian ship owners, potentially leading to a surge in business activities within the maritime sector.
Speaking on the active engagement of Nigerian ship owners, Adewumi said that he was not aware of Nigerian ship owners carrying crude oil for the Nigerian National Petroleum Corporation Limited (NNPCL).
“Dangote said that from next month that they will be producing, that Nigeria doesn’t have business in importing gasoline anymore and that they will flood the market with gasoline. Of course, it is a positive one for Nigerian ship owners. If it will stop importation and it’s taken locally, then if you make the product very cheap”, he said.
On his part, another ship owner and oil expert, Sola Olatunji affirmed that the Dangote Refinery, alongside upcoming public and modular refineries would be a significant step towards establishing Nigeria as a leading maritime hub in West Africa.
Olatunji highlighted the expected boost to the shipping business, pointing out that the Dangote Refinery’s entry into the market would likely see Nigerian ship owners playing a pivotal role in transporting crude oil across West Africa.
While stressing on the transformative potential of these new refineries for Nigeria’s shipping industry, Olatunji expressed skepticism regarding the timeline. Despite the official promise from Dangote to be fully operational by next month, he suggested that actual production might commence by the end of June or early July 2024.
Amidst the anticipation, Olatunji raised concerns about the current state of Nigerian ships in the crude oil transportation sector. He lamented a significant issue facing the industry, stressing that no Nigerian ship is currently involved in lifting crude for the NNPCL.
“With Dangote Refinery coming on stream and public refineries with some modular refineries being expected, one should celebrate that Nigeria is truly trying to justify her status as a maritime hub in West Africa. It is breaking news already, but I doubt the timeline.
“I expect that with a gamut of activities in our refineries, it should boost shipping businesses in Nigeria. You should know that Dangote will automatically take over West Africa markets, and Nigerian Ship owners will be available to do the job.
“Dangote promised to start operations fully next month but I doubt he wasn’t trying to market his company. Dangote refinery may start producing oil probably at the end of June or early July. But as we speak, no Nigerian ship is currently lifting crude for NNPCL. You can talk to other ship owners; they are likely to tell you the same thing”, Olatunji concluded.
NIMASA Advised to Reevaluate Strategy For Modular Floating Dock 3
By Oluyinka Onigbinde
In light of the ongoing concerns surrounding the Nigerian Maritime Administration and Safety Agency’s (NIMASA)-owned N50 billion modular floating dock, key stakeholders in the nation’s maritime industry have provided advice on how to address the issues plaguing this substantial investment.
Mr Bolaji Sunmola, Chairman of the Nigeria Port Consultative Council (NPCC), and Otunba Sola Olatunji, a prominent ship owner and member of the Nigerian Ship Owners Association (NISA), in separate chats with our correspondent shared their perspectives on what steps NIMASA should take to maximize the dock’s potential and alleviate the maritime sector’s challenges.
On his part, Mr Sunmola, Chairman of the NPCC called for a comprehensive re-assessment of NIMASA’s core values and strategic objectives concerning the modular floating dock. Sunmola emphasized that NIMASA must determine whether managing a floating dock aligns with its fundamental mission. “NIMASA really needs to define their core values and what NIMASA is established to do,” Sunmola stated. He highlighted the need for the agency to scrutinize past decisions and evaluate if such investments align with its mandated responsibilities.
Sunmola pointed out the discrepancy between the operational challenges of the national fleet and the substantial resources tied up in the floating dock. “We have the local fleets suffering and most of our cargoes being carried by foreign liners, and then we have this tied down,” he noted.
This, he argued, calls for immediate and strategic decision-making. Sunmola advised NIMASA to re-assess whether managing the floating dock is within its core functions. If not, the agency should consider other alternatives, such as leasing or concessioning the dock to private entities better suited to operate it.
Highlighting the success of private initiatives globally, Sunmola recommended that NIMASA collaborate with private companies. “If there are some kinds of private-driven initiatives into this, it will work,” he asserted.
He also suggested that the government should facilitate and create an enabling environment for private sector participation rather than its agency directly managing such assets. Sunmola urged NIMASA to revisit its strategy and consider the essential needs of the maritime sector. By working with private enterprises, the floating dock could be effectively utilized, benefiting the industry and the economy. “Government has no business in running business. Government is in the business of facilitating or creating the environment,
“This approach would align with global best practices, where private entities manage specialized maritime infrastructure under government oversight” he said.
“The modular floating dock, if properly managed, holds the potential to transform Nigeria’s maritime industry by reducing dependency on foreign dry-docking services, saving foreign exchange, and creating employment opportunities
“By re-assessing its core functions, embracing private sector collaboration, and ensuring operational readiness, NIMASA can turn the floating dock from a moribund investment into a cornerstone of Nigeria’s maritime infrastructure.
“This transformation will not only benefit the agency but also bolster the entire maritime sector, contributing to Nigeria’s economic growth and development”, he stated
Speaking also, Otunba Sola Olatunji, a ship owner provided a pragmatic view on the floating dock’s current status.
Olatunji in a chat with our correspondent stated that the ship owners during a meeting with the NIMASA’s Director-General; Dr. Dayo Mobereola Olatunji last week, had emphasized the importance of repair yards but said the ship owners did not specifically focus on the floating dock. However, Olatunji maintains a positive outlook on the dock’s potential.
He explained that the floating dock remains a valuable asset for the government, and its proper utilization could significantly benefit ship owners. “The floating dock is there; it is the asset of the government. I think they are in a better position to put it in place and allow ship owners to start using it,” he stated. He emphasized the need for NIMASA to operationalize the dock swiftly to support the maritime industry.
He urged NIMASA to adopt a more strategic and collaborative approach by ensuring that the floating dock is fully-operational.
He noted that this includes finalizing site preparations at the Continental Shipyard and addressing any technical or logistical challenges. Engaging with private sector partners to manage and operate the dock can enhance efficiency and effectiveness.
