A Review of the Nigerian Energy Industry

Reverse oil tanker ban, global body tells NNPC

24 July 2015, The global oil tanker industry association, INTERTANKO, has faulted the decision of the Federal Government, through the Nigerian National Petroleum Corporation, to ban 113 oil tankers from lifting the country’s crude oil.

Joseph Dawha, NNPC GMD
Joseph Dawha, NNPC GMD

Reuters reported on Thursday that the association, in a letter of protest, demanded that the ban should be lifted immediately as no grounds had been given for the measure.

The NNPC issued a letter on July 15, citing a directive from President Muhammadu Buhari, that the vessels, mainly VLCC crude oil tankers, were banned from calling at Nigerian crude oil terminals and also from Nigerian waters with immediate effect.

However, INTERTANKO, whose independent members own the majority of the world’s tanker fleet, said in a letter to the NNPC, dated July 22, that there were no “evidence or grounds” given for the ban.

“INTERTANKO protests in the strongest possible way that these bans should be lifted with immediate effect until grounds and evidence for the ban have been given to each vessel and vessel owner/operator, and the owner/operator has had an opportunity to respond,” the association’s General Counsel, Michele White, wrote in the letter.

Since taking office in May, Buhari has been working to fulfil a campaign promise to tackle corruption, particularly in the oil industry. He has dissolved the NNPC board and ordered an investigation into a scheme through which the country swaps crude for oil for refined products such as petrol.

“The timing of the ban is clearly a political signal to show the Buhari administration is clamping down on oil theft,” said Alex Vines, head of the Africa Programme at Chatham House.

“The challenge now is for the Nigerian authorities to provide credible proof that these indexed vessels were engaged in illicit activities,” he added.

A sample of 75 vessels on the list that Reuters tracked showed that only around 14 had been to Nigeria or neighbouring countries in the last 180 days.

White said the list of banned tankers was “not exhaustive and already further tankers are being added.”

The INTERTANKO general counsel said in a separate note to members, “Our current understanding is that these ships may have been targeted due to a failure to provide official outturn figures at their last call and/or commercial differences between load and discharge figures for cargo and free water.

“This may also, however, be part of a general crackdown by President Buhari on corruption in Nigeria’s maritime, oil and gas, financial services and security sectors, including illegal bunkering and fuel sales.”

White said after INTERTANKO had spoken with its members in some cases the ship had not called in Nigeria for several years, or at all.

He added, “In others, the ship has changed ownership since her last call in Nigeria.

“Members have also advised that some oil majors are attempting to introduce charter-party clauses requiring the owner to warrant that the vessel is not subject to any Nigerian bans or restrictions due to failure to report any outturn figures for prior voyages.”

INTERTANKO said it had advised its members to avoid such a provision.

“Owners whose vessels are blacklisted will have to be careful that they do not commit to trading to Nigeria whilst the threat of detention hangs over them,” said Stephen Askins of the shipping law firm, Tatham Macinnes.

“It is likely further vessels will be subject to the blacklisting,” he said in a note.


– Punch

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