A Review of the Nigerian Energy Industry

Terminal operators kick against amendment of Free trade zone Act

02 October 2014, Lagos – A group, Seaport Terminal Operators Association of Nigeria (STOAN), has opposed the move by the Senate to amend the Act establishing the Oil & Gas Export Free Zone Authority. 

In a petition sent to the Senate joint Committee on Trade and Establishment and Public Services, the group said that as stakeholders in the trade chain in Nigeria, the terminal operators were not informed nor invited to the public hearing which touched “on the essence of the concession programme of the Government of Nigeria”.

Tin Can Island port 1

The petition which was signed by one Mr. Uzamot Boye, Secretary of the group said that STOAN is a registered association of 26 terminal operators of Nigerian seaports that were concessioned by the Nigerian Ports Authority and the Bureau for Public Enterprise, BPE, and as such, have invested millions of dollars in reconstruction of some of the terminals, acquisition of equipment and payment of royalties to the Federal Government.

In the petition dated September 24th 2014, Boye noted that besides creating employment for Nigerians, paying taxes to the government, and contributing to the growth of the Nigerian economy, the group must be carried along in the proposed amendment of the Oil & Gas Export Free Zone Authority Act.

Parts of the petition read “A critical look at the proposed amendment, in particular the amendment of section 12, shows a clear violation of the existing extant laws and agreements on which the present port concessions are based.

“It is important to note that all the Terminals that were concessioned have its own separate and distinct subsisting agreements.

“In the circumstances therefore, we see these proposed amendments as illegal, biased and an attempt to serve a particular interest against the wish and will of Nigerians and against the spirit and letters of the 1999 constitution of the Federal Republic of Nigeria as amended which the Senators as lawmakers swore to uphold.”

The STOAN scribe stated in the letter that the amendment to the oil & gas export free zone Act CAP 05 LFN is premised on the consideration of the substantial investments made in Onne oil and gas free zone concession to Intels Nig. Ltd.

He said the proposed amendment also assumes “that only Intels Nig. Ltd has concessions in Onne, Warri and Calabar Ports among all concessionaires in the Eastern Port with General Cargo Terminals.

“That investors are free to choose Ports of discharge of their cargoes within the designated Terminals at Onne, Warri and Calabar Ports clearly violates the concession agreements of Terminal operators with general cargo terminals in the Eastern Port.

“That if the bill is passed into law, Intels Nig. Ltd with terminals in Onne, Warri and Calabar Ports will become a monopoly in handling oil & gas related cargoes in Nigeria contrary to the aims and objectives of the Federal government Ports Reforms, Modernisation and concessions through Privatisation and Commercialisation programme. “He stated that if the proposed amendment bill is passed into law and all oil and gas related cargoes are diverted to Onne oil & gas free zones, it will open a flood gate of litigations because of breach of the lease agreements with general cargo terminals.

He said: “That the concessions were done under the NPA and Public Enterprises (Privatization & Commercialization) 1999 Act and not the oil & gas export free zone Act CAP 05 LFN 2011 with specific GMT – Guaranteed Minimum Tonnage targets base on the expected general cargoes inflow including oil & gas related.

“That the proposed amendment is a duplication of the roles of oil & gas free zones and Nigerian Ports Authority (NPA).

“That the Seaport Terminal Operators Association of Nigeria (STOAN) have taken a    position that there is nothing like oil and gas related designated Port which has been communicated to the Presidency, the BPE, the National Assembly through its Committees on Privatization & Marine, the NPA and the Federal Ministry of Transport.” he stated.

– Vanguard

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